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IWeb provides an execution-only online trading service which gives experienced UK traders access to a low cost dealing platform, a wide range of asset classes and advanced trading tools. Operated by Halifax, IWEB focus on providing a service for experienced traders who require real time prices, sophisticated market analysis tools and low trading costs. While the £10 commission on UK share dealing is rather average, we must say that the same price for international transactions is very good. Spreads on CFDs are not bad either, starting at 4 pips, and with no regular admin or management fees IWeb is one of the cheaper products in this category.
To really squeeze your transaction costs as much as possible, IWeb´s regular scheduled investment scheme will bring commissions down yet further to just £1.50 per purchase. As with many other brokers in this category, this involves IWeb purchasing shares after your request at a certain time of their choosing. In the case of prices dropping after your bid, you may miss out on a lower share price, but on the other hand prices may rise meaning you got a great deal.
For small traders looking for medium to long term investments what you save in commission fees will generally outweigh any potential savings available to you given better flexibility. Do remember that transaction costs remain at £10 whenever you decide to sell. In this case, transaction costs will still be relative to the diversity of your portfolio, requiring you to balance your holdings according potential risk and reward. A more diverse portfolio will require more transactions and hence higher costs yet will be more steady as risks are spread, reducing potential losses (as well as profits); reducing the diversity of your portfolio is like putting all your eggs in one basket but will also reduce your transaction costs. Everyone will have a different trading strategy so there is no right or wrong way, but this is just something to keep in mind.
When it comes to their trading platform, It is quite clear that IWeb have pursued a "budget" strategy. It is very basic, certainly not pretty, yet it does have all the tools to satisfy most traders and it is not too hard to find your way around. Furthermore, IWeb offer traders access to real time prices which are generally only available with the more expensive brokers in this category.
However, despite initial appearances we soon became rather frustrated with the slowness of the platform. We experienced significant delays and difficulties in execution, especially during periods of market turbulence - probably the most important time for rapid transactions. We were also disappointed with the lack of links to company reports or invites to AGMs. Basically, with IWeb it is difficult to enjoy your full rights as a shareholder.
Overall, with low commissions, real time prices and some nice tools IWeb could potentially provide a simple yet effective service for a wide range of investors. However, we felt as though any benefits from access to real time prices were lost to slow server and connection speeds. It´s all very well having the most up to date market info, but it is useless if you cannot execute transactions based on it. We would recommend IWeb to users looking for low commissions on international markets and who are not especially interested in day trading. The rest of us will probably want to look elsewhere.
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