Stockbroker Excellence: Trading Platforms

In our series of stockbroker excellent posts, we zoom in on a specific feature or element of UK stockbrokers that helps the best brokers stand apart from the weaker offerings. This week, we’re looking at the trading platforms themselves. Some would argue that a trading platform makes or breaks a stockbroker. But equally some investors don’t mind using older or less intuitive interfaces as long as they incur low transaction cost!

If you follow our full series of stockbroker excellent blog posts, you’ll become familiar with all of the main characteristics of UK stockbroker accounts, and understand what choices you need to make when choosing your favourite.

Or you can let us do the work by analysing the best UK brokers and making a comparison for you. We’ve selected and filtered the top UK stockbrokers on our stockbroker comparison page. We’ve also compared the excellent range of UK investing apps available.

If you’re interested in just seeing a selection of the best brokers for UK investors, then head to those guides now. Otherwise, I hope you enjoy this informative article.

Researching markets

Every great trading idea comes from a body of research. But how easy is that research to perform, and how confident are users in the data they’re seeing? Some of the best FCA regulated brokers go to great lengths to present ideas and opportunities to traders as they explore the user interface.

Great trading platforms:

  • Provide a newswire service that streams press releases and Associated Press reports as soon as they’re made public.
  • Allow investors to browse markets to perform open-ended research
  • Provide a wider range of markets. The stock market is just the beginning. The more asset classes that can be traded, the wider the pool of opportunities
  • Incorporate opinion and commentary sections, so that an investor, if they choose, can see what’s on the mind of other traders
  • Provides level 2 pricing data which shows far more information about the offer and ask prices currently on the market.

Weaker trading platforms:

  • Assume that an investor already logs onto the platform with a specific trading idea
  • Restrict trading to just a handful of high volume securities
  • Incorporate no social elements
  • Provides only level 1 pricing data.

Selecting instruments

Finding a financial instrument, such as a share or bond, needn’t be a chore.

Great trading platforms:

  • Allow you to search for a security by name or by browsing well-known indexes, such as the FTSE 100.
  • Make it clear that an instrument is dual-listed on multiple exchanges

Weaker trading platforms:

  • Require a ticker symbol to find an instrument
  • Expect investors to already know which exchange quotes for that instrument

Execution of a trade

Pressing the button to ‘buy shares’ or ‘sell shares’ is often one of the most daunting aspects of using a stockbroker account.

There’s the uncertainty of ‘Have I entered the information correctly?’, ‘Did the trade go through?’. But great trading platforms provide the right information at each stage of trade execution to give clarity and confidence to the trader.

Great trading platforms:

  • Allow the investor to choose either a £sum or a quantity of shares to buy or sell. Originally, brokerages only took orders as a number of shares. This required investors to work backwards using the latest share price to calculate how many shares they can afford with the amount they wanted to invest.
  • Use fingerprint or similar authentication to remove the need to enter a dealing password for each trade
  • Provide instant confirmation of the share trade success
  • Give a clear indication that a trade is in progress, and when the portfolio view will be updated to include the latest transaction or pending transaction.

Weaker trading platforms

  • Give little instant reassurance that the trade has successfully completed, and the total net cost/receipt expected.
  • Are slow to update the portfolio to show the impact of transactions. Often, it can take 3 working days for a share purchase to fully complete. During this time, the cash may be shown as a deduction an account, without the corresponding shares appearing, which can leave investors in a nervous limbo.

Which UK stockbrokers have the best trading platforms?

In our review of eToro, we draw out its slick trading platform as one of its strengths compared to brokers with older user interfaces such as AJ Bell (review) and Interactive Investor (review).

The best stocks & shares books will provide plenty of information about the pros and cons of different trading platforms. There are too many different platforms to cover in detail in a single article, as most of the larger stockbrokers offer a proprietary user interface.

As the top day trading books will make clear; the needs of a day trader are very different to a buy and hold investor. When researching the best day trading platforms, you’ll want to look for a different set of attributes which we have not covered in this article.