Nowadays Australians have more choice than ever when it comes to investing. Long gone are the days of squinting at stock tickers in newspapers for the latest share prices, only to call a broker and trade shares at exorbitant prices.

Whether it is 'micro-investing' platforms, share trading and investing platforms, sophisticated platforms for 'active trading', or even 'robo-investing' platforms there are now solutions to meet the needs of every investor.

But what do all these different investment platforms have to offer? What even are they? And what sets Selfwealth apart from other investment platforms? Here, we're going to be frank.

It doesn't matter if you're new to investing or the next Warren Buffett, your investment platform needs to be there throughout your entire wealth creation journey, which means you should pick right the first time. In order to help you do that, we're here to separate the wheat from the chaff.

Micro-Investing Platforms

In recent years micro-investing has become a popular phenomenon for newbies whetting their investing whistle.

Micro-investing is an investing style where you deposit very small amounts of money into an investment portfolio over time. For example, $2 one week and then $5 the next. These types of platforms have little barrier to entry and are simple to set up. In some cases, they even allow you to round up the loose change from everyday transactions and invest this through your investment portfolio. (But not CommSec Pocket, they have a minimum investment amount of $50.)

Micro-investing platforms offer a portfolio of ETFs, or managed funds tailored to specific investment themes, criteria, or values.

With the likes of Raiz, Spaceship, Revolut, and even CommSec Pocket all offering products in this sector, entry-level investors are spoilt for choice.

Micro-investing platforms might suit those who have never invested, or have very limited funds and want to do something with their spare change, they have a number of limitations. They're also a temporary solution intended to springboard you into regular investing, meaning you might eventually have to transfer all your holdings.

With the exception of CommSec Pocket, investments made through these platforms are held by a custodian and not registered directly in your name. (This is a 'CHESS' holding more on that below). Micro investing also offers an extremely limited selection investments, unlike the thousands of stocks and ETFs available elsewhere (read: through your Selfwealth account).

These platforms also have limited features and functionality and any dividends are automatically reinvested into your holdings, so you're giving up control over your investment decisions.

Pros:

• Invest small amounts 

• Can automatically round-up transactions to 'set and forget' 

• Great for beginners

Cons:

• Most don't let you own your shares

• You may have to transfer out once you graduate to a more mature platform

• Limited selection of funds to invest in

• You can't control dividends

Share Trading and Investing Platforms

For investors with a long-term mindset, the current crop of share trading and investing platforms is a who's who of names. The big four' banks used to dominate the market but today many are making the banks look like dinosaurs.

As the first flat-fee share trading platform in Australia, Selfwealth has played a pivotal role in transforming the trading and investing landscape across the country. (Humble brag: Selfwealth is the only Australian investment platform to knock a big four bank off their standing¦ and we're coming for the podium.)

On the whole, share trading and investing platforms like Selfwealth are readily accessible. You can start investing in shares with just $500, plus brokerage, and buy a diverse range of securities and products across international markets. These platforms allow you to better align investments with your beliefs and values in a long-term manner while harnessing detailed research. Unlike other options, this freedom means you can choose exactly how you want to invest. You can choose whatever stocks or finds you like across a wide range of sectors enabling you to have a supremely diversified portfolio. This way, your entire portfolio isn't at risk if one sector crashes.

But not all share trading and investing platforms for everyday investors are created equal.

Unlike Selfwealth, where we offer CHESS sponsored share trading for the ASX, a number of platforms such as Superhero and IG don't let you to hold shares directly in your personal name under your own 'HIN' or 'holder identification number'. This means the shares you hold with Selfwealth really are yours, rather than held by a custodian on your behalf.Read here about the importance of CHESS sponsored holdings.

Meanwhile, some brokers like CMC Markets and CommSec offer low brokerage for trades under $1000, but no flat-fee model. So once you start to invest above this amount, you face higher fees or a percentage commission that is significantly higher than with Selfwealth.

If you're in it for the long-haul, do you really think your trade sizes won'tgrow as your portfolio does? That why we love offering our members flat-fee brokerage.

And lastly, other platforms like Stake offer limited functionality, including no market depth, and no community insights as you might find through the Selfwealth share trading platform. Foreign exchange fees are also higher for international shares, while Selfwealth publicly listed status means you can always see how sustainable our business model is.

Pros

• Readily accessible most create accounts for free

• Allows you to 'dollar cost average', considered by many the most effective investing strategy

• Will provide education to help yo become a sophisticated investor

• Some, like Selfwealth, offer low-cost, flat-fee brokerage

• CHESS sponsorship available for some

• Freedom of choice and ability to align investment values with personal ethics

• Community insights let you see what others on the platform are trading

Cons

• Minimum first investment of $500 (although you can top up with any amount)

• Requires you to invest with a long-term mindset

• While many research and tools are provided, day traders may require more technically sophisticated graphs and capabilities

Sophisticated Investment Platforms

Active trading platforms

There is a relatively small space in the market tailored towards more experienced investors desiring a sophisticated investment platform with all the bells and whistles that facilitate active trading (buying and selling shares often and trying to time the market). Interactive Brokers is one of the more well-known players in this segment of the market.

Active trading platforms are tailored towards a broad range of international markets and assets, featuring advanced charting, and, in the case of Interactive Brokers, low brokerage costs.

Naturally, this genre has limitations. And they are not suitable for individuals who are new to investing or even moderate-to-experienced investors for that matter. Why?

Because these platforms:

• Are typically complex to use and rarely user-friendly.

• Often feature a steep learning curve.

• Are tailored for active traders, but it proven that most day traders lose money.

• May treat you as the product; your data is sometimes sold to third-parties.

• May include activity, maintenance, and custody fees if you are not trading regularly.

• You might not actually own the underlying holding. If they aren't CHESS sponsored, they own your shares and act as a custodian'.

Pros:

• Tailors to the sophisticated investors and analysts who have been in the markets for years

• Some have low brokerage costs

Cons:

• Data shows that most day traders lose money compared to those who invest in ETFs or funds

• Many aren't CHESS sponsored

• Your data may be sold to third parties

Robo Investing

One of the latest areas to emerge in the industry is robo-investing, which is a type of investment platform where a robo-adviser offers a suite of portfolios where you can take a more hands-off, automated approach to investing.

These platforms rely on investment professionals running the show in the background as far as portfolio management, product evaluation, customer service, and the like.

This is tempting but keep in mind that you're paying a management fee for this service. Could you do it yourself instead? After all, many of the investment products available through robo-advisers are ETFs that you can buy directly through an investing platform like Selfwealth.

Although robo-investing platforms such as InvestSMART, Stockspot, and Six Park might be suited where you don't have the time to build a share portfolio from scratch, they feature a higher barrier to entry.

You will generally need to have a significantly higher amount of money to start with (a few thousand, not a few hundred), and ongoing fees are generally more expensive than direct investing through a share trading or investing platform. Furthermore, you have less control over what you invest in as you're selecting from pre-made products.

Pros:

• Automates your investments for you

• Access to the practices of professional advisers

Cons:

• You need significant capital to start with

• Management fees are very high compared to other investment platforms

• Less control over your investments

How to Choose Your Investment Platform

When deciding which investment platform to use, the most important things you should consider are:

• Your objectives and investment style.

• How much money you have to invest.

• The features, benefits, and downsides of each investment platform.

• The full list of fees associated with the platform.

• How comfortable you are using each platform to pursue your goals.

Depending where you are in your wealth creation journey, you might find yourself transitioning between investment platforms, but the one that is best for you is the one that works in your favour, helping you stay in the market for decades, not days.