Trading Platforms - What You Need to Know

Sam Dorm

If you're considering entering dealing in stocks and shares, there are various ways of going about it. Thanks to developments in technology, electronic trading is fast becoming the preferred method of trading stocks and shares. Whether you're an experienced investor or a novice looking to boost their savings, it's likely that you'll be performing your investment online via a share dealing account platform. But what exactly is it?

Buyers and sellers are brought together on share dealing account platform - a virtual worldwide marketplace where investors can buy, sell and trade their shares, all from a computer or mobile phone screen. Mostly used by fund managers of IFAs - although consumers can also use them directly -, a platform is an online based service and is an affective way of managing investments in the stock market. As technology advances, the tools that a platform can offer are becoming more sophisticated allowing investors to view, analyse and arrange the transactions of a whole investment portfolio. They have been designed to improve administration of portfolios and are offered as a part of a share dealing account package by most banks and providers.

Share dealing account platforms are also known as wraps or fund supermarkets and there are slight differences between the two. A fund supermarket usually offers a range of unit trusts and open ended investment companies (OEICs). Wraps on the other hand usually offer this plus additional products. Wraps are also more suitable for fund managers who want to calculate their own renumeration packages with their clients, rather than the independent investor. It's important to check which one you are getting and know which investments can be managed on each platform.

Features of a share dealing account platform:

- Simplicity - a platform can help simplify the management of your portfolio.
- Choice - your investments can be wholly managed by a professional (for an extra charge), part-managed, or you can choose to trade independently.
- Sophisticated interfaces.
- Real time updates of market performances and transactions, plus the ability to buy, sell and trade within the click of a button.
- Accessibility - You can manage your portfolio from the comfort of your own home or even on the move from your mobile.
- Additional tools - A platform may have various tools such as risk profiling, charts, reports and guides.
- Additional support services such as help facilities and training from on hand experts with indispensable insider knowledge.
- Easier to check diversified portfolios which may have complicated asset locations.

Things to consider when using a share dealing account platform:

-  Level of service. Do you require an execution only service (you want to invest independently) or do you want a share dealing account manager to invest in your best interests?
- Ease of use - does the platform strike a good balance between sophisticated tools and usability?
- Charges - How much does will the provider charge to use the platform and carry out trades? Perhaps the platform comes included in the share dealing account price of a monthly fee or they may charge you for each investment you make. You also need to be aware of transfer, advice and exit charges and possible commission when weigh up your options.

Sam Dorm
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