Have the best of both worlds

Shrewd investors are discovering the benefits of a well-established platform that offers the lower costs and flexibility of execution-only broking, while providing information and education


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The months of October to December are typically when markets experience higher volatility and therefore usually provide significant opportunities for traders who want to make gains. This is particularly true for the growing army of retail investors who are benefiting from the tools and the trading environment that allows them to buy and sell at home, usually in their spare time.

But, as all investors know, however big their portfolio, making informed decisions and managing risk is essential to maximise profits. It’s important to know when to go long or short and to be able to get out of positions quickly and with minimum cost.  Effective hedging is also vital when it comes to managing risk.

Many execution-only platforms provide retail investors with the opportunity to react quickly to market changes to buy and sell cost effectively. However, they offer little or none of the information, intelligence and background knowledge that a stockbroker or other adviser could provide. Investors are often left to follow their instincts or to waste hours searching for information and data that they have to decide how to act on.

Over the last few years, though, as a growing number of shrewd investors have discovered, there is a way of getting the best of both worlds. These investors are able to act quickly and with low costs to take advantage of volatility, but they are also benefiting from the sort of information, insights and support that is traditionally reserved for professional traders.

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They’re doing this through a platform called Interactive Investor (II). Launched in 1995, II is an award-winning online investment service that provides retail investors with unbiased financial information together with the tools and trading environment they need to make informed investment decisions.

As an execution-only broker, II doesn’t offer advice, but it does offer a comprehensive range of financial services. Customers can choose from investment options, including share and fund dealing, SIPP, ISA and Junior ISA trading accounts, plus an extensive research range, investment filters and a selection of ready-made investment options.

Because all investors are different, with their own particular requirements, investment pots, levels of knowledge and appetite for risk, II offers a wide range of services.

Investors are able to act quickly and with low costs, but they are also benefiting from information, insights and support traditionally reserved for professional traders

“Some people will only be interested in simple, low- risk options, such as gilts and bonds, while others might feel more comfortable with higher-risk, more complex products, such as spread betting, contracts for difference (CFDs) and foreign exchange,” says Mike McCudden, head of advanced products at II. “If they want to they can graduate whenever they feel ready, knowing that they’ll get information, learning tools and support at every stage of their development as investors.”

These services have been a key driver of the platform’s success, he believes. Unlike traditional execution-only platforms, II offers its growing army of clients the opportunity to educate themselves on all aspects of the investment opportunities on offer and of the markets they’re trading in.

This is something that is being recognised and lauded by the industry itself; among various awards last year, II was rated first for the cost of its service and the quality of its content by the Platforum Guide and it won Best Platform 2014 at the City of London Wealth Management Awards.

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Many clients particularly like the video tutorials and the written practical guides, which cover issues such as trading with spread bets and CFDs. Another example of II’s challenge to the tradition execution-only model with its lack of market intelligence is the up-to-the-minute news on the trading platforms including access to analysis from the company’s own team. Articles such as 12 Rules to Beat the Markets offer practical, accessible information for those who want to improve their investment performance.

Accessibility is another element that appeals to retail investors. “We’re finding that our clients really appreciate that they can trade on their desktops, on II’s tablet and mobile apps or over the phone,” says Mr McCudden.

“They also like the fact that we offer the low fees of an execution-only platform with fair and transparent pricing, but they can still get useful market intelligence, support from our staff, a discussion board on which they can exchange information and ideas with other investors, and a scalable trading platform.

“If you’re an investor looking to benefit from market volatility this winter, then II can help you, whatever your level of experience and risk profile.”

LOW COSTS AND FLEXIBILITY

PLUS HELP AND SUPPORT

After the 2008 crash, investors are increasingly keen to ensure they are well informed and supported before they invest in relatively complex, but potentially lucrative, products such as spread betting, contracts for difference (CFDs) and foreign exchange – all of which have a part to play in a varied, balanced portfolio.

Because of this Interactive Investor (II) has created a one-to-one support service. An account manager takes spread-betting, CFD and forex traders through the trading platform, helping them with any technical questions and guiding them through the wide range of trading tools available. Traders can choose the package that is right for them and make the most of advanced trading tools available. There is also a suite of risk management tools from guaranteed and trailing stops to one-cancels-the-other-orders.

II offers some of the tightest spreads and lowest margins across a wide range of markets, and the more investors deposit, the more advanced trading tools II will add to their account. For example, those who deposit between £200 and £2,499, the Bronze level, will receive Autochartist, a tool to help them to spot trading patterns they might otherwise have missed plus Trading Central which provides ideas and research portal access. For those who upgrade to Silver and Gold there are even opportunities to access information and insights.