Trading Feature Improvements

[Sheldon]

Hi,

In order to give IE investors better value for money, please can you consider making the following changes?

Trading Execution Window

Would IE consider moving their trading window to the opening or closing hour?

Currently trades are executed after 2.30pm with trades general being executed between 2.45pm-3.35pm. However, fewer trades take place at these times compared to the opening and closing hour. This means that the bid/ask spread is consistently higher for IE investors than it needs to be. As the Open/Close Hours are when most trades take place and the market is therefore more liquid, the bid/ask spread is likely to be significantly narrower. This especially matters for people who invest in more illiquid ETFs such as small caps or thematics.

I know people talk about not ‘timing the market’ and I agree with that. This wouldn’t be timing the market as it is based on a well known observation that occurs consistently over time. Secondly, it’s not about trying to get the ‘best market price’ as there would be no way to guarantee that, but rather about reducing the hidden fees that we all pay to market makers every time we trade. Whilst the spread is generally tiny for most liquid securities it will still make a significant difference to reduce this fee over an investing lifetime.

Finally, the US stock market does not open until 2pm and most US stock related news is released around this time or just after. As US stocks represent approximately 63% of tradeable global equites, they are likely to be highly represented in most, if not all, investors portfolios to some degree. News releases and earning reports can have a significant effect on stock prices, so placing the trading window at around the time news is released and after the order placing time puts IE investors at a significant disadvantage.

Shorten the time between placing and executing orders

Currently, orders must be placed by 2pm to be carried out the same day with orders advertised as being carried out after 2.30pm. In over 2 years of using IE, I have never received an execution time close to 2.30pm. The earliest is around 2.40pm which is still at least 41 minutes after the latest possible time you could have placed an order. Most orders are executed after 3pm. Today, for example, my orders were not executed until around 3.30pm. This was 90 minutes after the order window closed. Because of this, prices quoted on IE are inaccurate and out of date effectively meaning that investors are flying blind when placing orders. This is evidenced by the substantial amount of cash that is returned to me on each occasion I place an order. Reducing the window to exactly 30 minutes before the order will be executed represents a compromise between keeping IE’s costs low via a single trading window whilst giving investors some semblance of what to expect. This would improve efficiency as money wouldn’t need to be returned to the portfolio account because of discrepancies between the quoted price and the transaction price and would save investors unnecessary transaction fees.

Orders on a Per Share Basis

It would be really useful to have in addition, to providing an order in cash, an alternative such as the number of shares someone wishes to purchase. The former is good for fractional sharedealing and reinvesting dividends, but the latter is useful particularly if you are spreading a lot of cash across several securities and want to be sure you are getting x amount of shares. This issue kind of relates the above, but it is so frustrating to be given an estimate of the amount of shares x cash will buy only to find the execution being for significantly and consistently less than what I was expecting.

I like the platform and want to continue investing with IE, but you really need to overcome these issues considering that free to use alternatives such as Trading 212 etc. provide them already. Accurate and timely price quoting is a minimum expectation for any investor.

[nedjohn]

Dear InvestEngine, when considering the above suggestions, note that I prefer the trading time where it is currently. I would rather take the consensus market price that emerges, after the opening volatility risk for the US market has reduced.

I don’t see a spread issue, but I generally invest in liquid core funds.

Maybe consider providing an option rather than moving the time for all.

[Valex]

I don’t mind the trading time, but an option to buy whole shares would be very helpful. Not sure, but it seems as if IE is the only platform where fractional shares are the only option…

[Pinch]

If you want to buy whole shares you would have left money left over afterwards. With fractional shares there’s only little money left over in the account at any time - if you use DIY accounts. It may be different within Managed portfolios due to the 0.25% fee.

[patch]

Trading Execution Window

There is certainly an issue occasionally around the 2pm, as the market can react sharply to US economic data around market open. This can be very frustrating, as the market typically reverts to mean (falls back) later in the evening.

I would of thought an earlier execution time would be better, say 12pm, like Unit Trusts. however, the easy way round this is to “dip in” small amounts of money in (or out) over a few days, i find.

Orders on a Per Share Basis (Vs £Amount )

The issue is you dont get a “whole share” nor the “set amount” ordered. I have documentary evidence of this. I ordered £500 of XYZ ETF; the trade went through; but showed as -£498.39 for +42.964554 shares. As it turns out that was only 42 pence short of 43 whole shares. The extra 42 pence was easily in the scope of the £500 order. Why did i only get 42.964554 shares and not at least 43 shares ? According to their T&Cs they always buy “the entirety of a share” , so it was bought by IE, so where the heck did the 42p worth of XYZ ETF end up? I would have preferred to get 43 shares or £500 of the ETF. I got neither !!! Its happened a few times, but this occasion was beyond belief.

I have not complained as its probably considered as Slippage and there is no financial loss case to be made. However, they might like to look at their wonky ordering system some time !!!

[fionagraham]

Hi all - I’ve forwarded all your feedback on to the team to have a look at. As always, it’s super useful to hear what you, the users, think about things!