Are share prices the same on every platform?

7sefton

Hi all

Probably an obvious question, but are share prices the same on every platform?

I used Interactive Investor for years and just switched my ISA to IG (because it’s completely free as long as I make one trade a month, which I do anyway for regular investing). 

However it just got me thinking, how can IG offer the entire service for free? Do I somehow pay for this through then offering me worse prices when I buy a share?

jim1999

Technically no, but practically yes.  As far as I can recall under MIFID 2 and the best execution principles (wording might be slightly off) they are required to give you the best price they can.

wmb194

7sefton said:

Hi all

Probably an obvious question, but are share prices the same on every platform?

I used Interactive Investor for years and just switched my ISA to IG (because it’s completely free as long as I make one trade a month, which I do anyway for regular investing). 

However it just got me thinking, how can IG offer the entire service for free? Do I somehow pay for this through then offering me worse prices when I buy a share?

No, they're supposed to offer the best prices they can find in the market but they might not all use the same panel of market makers e.g., I find CMC Invest has a tendency to offer the live bid or offer price and only occasionally  prices within the spread. Freetrade, T212 and IG will offer prices within the spread though.

I've recently begun using IG and its quotes look fine to me. It's the first no commission broker I've used that offers 15 second quotes for LSE trades so I'm very happy with it.

You can check them against another broker easily enough e.g., get a quote simultaneously from iWeb, HL, AJ Bell etc. I used to do this a lot but I rarely noticed any differences - sometimes with small cap ITs - so don't worry about it anymore.

IG, CMC and T212 are diversifying into traditional stockbroking and are probably subsidising their low fees through the profits they make from people losing their gambles on CFDs. Freetrade and CMC have already introduced 'freemium' price plans and in time the others may follow. They also make money from FX fees and earning interest for themselves on your cash.

GeoffTF

When people have checked, the big brokers all offered the same price for online transactions. They all seem to connect to the same market makers. That probably applies to IG too. The Monevator comparison table says that IG charges £96 p.a. That is not cheap.

wmb194

GeoffTF said:

When people have checked, the big brokers all offered the same price for online transactions. They all seem to connect to the same market makers. That probably applies to IG too. The Monevator comparison table says that IG charges £96 p.a. That is not cheap.

That’s not quite right: IG only charges a fee of you don’t meet certain criteria i.e. you don’t make three trades in the quarter or have £15k invested in an IG Smart Portfolio account.

https://www.ig.com/uk/investments/share-dealing/costs-fees

Hoenir

7sefton said:

However it just got me thinking, how can IG offer the entire service for free? Do I somehow pay for this through then offering me worse prices when I buy a share?

Unlike in the USA, payment for order flow is illegal in the UK. 

dunstonh

Probably an obvious question, but are share prices the same on every platform?

For onscreen display....  Some will be live.  Some will be snapshot at a given time.   Some will be delayed live.

For purchase they will be the correct share price given the method of purchase you choose to use.

poseidon1

GeoffTF said:

When people have checked, the big brokers all offered the same price for online transactions. They all seem to connect to the same market makers. That probably applies to IG too. The Monevator comparison table says that IG charges £96 p.a. That is not cheap.

That has not been my experience with regard to purchases and sales of corporate bonds between ii and HL. II consistently gave better terms between the bid offer spread compared to HL. 

kempiejon

I occasionally get communications, the most recent I found was from April, from HL saying how much money I saved by their prices being so good. They proudly state "We beat the market price for 95%* of the deals our clients place. Just another reason why we’re the UK’s largest retail stockbroker." 
I don't really care, nor check but in April apparently HL saved me £26.

wmb194

kempiejon said:

I occasionally get communications, the most recent I found was from April, from HL saying how much money I saved by their prices being so good. They proudly state "We beat the market price for 95%* of the deals our clients place. Just another reason why we’re the UK’s largest retail stockbroker." 
I don't really care, nor check but in April apparently HL saved me £26.

This is the claimed saving because they can usually trade within the spread. The same as every broker, except possibly CMC... Barclays Stockbrokers used to call this, "Price Improver" but it's all a frost as they mostly all appear to use the same market makers ("Retail Service Providers") and so achieve the same prices.

GeoffTF

poseidon1 said:

GeoffTF said:

When people have checked, the big brokers all offered the same price for online transactions. They all seem to connect to the same market makers. That probably applies to IG too. The Monevator comparison table says that IG charges £96 p.a. That is not cheap.

That has not been my experience with regard to purchases and sales of corporate bonds between ii and HL. II consistently gave better terms between the bid offer spread compared to HL. 

I did write "online transactions". Do both II and HL trade corporate bonds online? HL does seem to have a good reputation for prices over the telephone, but it is difficult to conduct a convincing test for that.