Which platforms are faster at carrying out a deal during COVID-19?
09 July 2020
Question by David
I have been using iWeb for about 6 years and I find its ok but I have not tried other platforms. I was going to sell when COVID-19 surfaced, but I know that iWeb takes 2-3 days to carry out a deal. Are any of the other platforms faster?
Answered by Holly Mackay
iWeb is cheap as chips and extremely basic. It works, it’s functional and costs are low but it’s certainly not the prettiest! Depends what your priorities are. Neither does it have good research blended in, a nice app or a helpful interface. Depends what your priorities are.
Most trading platforms are governed by what we call ‘best execution rules’ on trading so this is not usually a point of differentiation.
Share trades are usually instantaneous unless you’re using a platform which clearly tells you that they keep costs down by executing in bulk once a day. Not many of these around though. It is probably the fund trades which you have seen to be slower.
Every fund has a ‘unit price’ worked out every day and strict cut-off times for applying this price. Let’s say I run the Holly UK Shares Fund. The fund’s price for Tuesday will be calculated on Wednesday. This price is called the NAV (net asset value). Normally, if you buy or sell a fund before 2pm on the Wednesday, you will get the NAV for the Tuesday. The fund manager then takes 3 or 4 days to sell the corresponding shares to get you your money, collate it and pay it out to you. This process is called settlement. Most funds will have a settlement time of T+3 or T+4 (T= trade).
Of course in practice a lot of buys and sells just cancel each other out so the fund manager is not literally selling 2 BP shares here and 5 Ocado shares there to get you your money back. But you get the point. There is a time lag with funs because you are part of a bigger collective structure.
Generally speaking no one platform will be quicker or slower here than any other as they’d get into trouble.
Have a look at our Best Buy tables and also our pricing calculator to see decently priced alternatives to iWeb if you are minded to shop around.