Comparing Spread Betting Providers: Competition
Spend any time on trading forums and you’ll soon find out that traders are very particular about the platforms that they use and are certainly not shy about being critical about others. In the face of such fierce loyalty, spread betting providers are introducing new features to their platforms in the hope of enticing new users, retaining existing clients and persuading them to trade more.
The spreadbetting and foreign exchange platform market is a highly competitive one and so providers are constantly looking to add new features and improve existing functionality. For a significant number, ‘added extras’ proved to be important consideration when choosing a platform. Easy-to-use online technology, dealing functionality, mobile technology, comprehensive market coverage, research tools and online educational material – such as video – are all frequently cited as key factors in the decision making process. In fact, today as a customer, you will be commonly be given access to research tools, news articles, a share research centre, a demo (simulator) account and an email alerts service. Providers also sometimes make available technical and regulatory updates as well as educational pieces via email.
Lately, the focus has been on improving the social trading aspects, especially as trading is a solitary experience for many people who would actually benefit from being part of a wider, active trading community.
But are the tools, information, calculators and videos value for money? Or are we still dominated by price? Our research show that clients still place tight bid-offer spreads as their primary driver behind provider selection. However, we also identified other areas that influence traders’ selection decisions, including the range of markets, ease of use, comprehensive online functionality (including dealing facility), research tools and having access to tools such as mobile applications.
Do watchout for inactivity fees! Low spreads clearly remain important, but in the current highly competitive, price sensitive market, those little ‘added extras’ may have a very big role to play. After all, if provider A and provider B can’t be separated on cost, the decision to choose one over the other must be based on something. Apart from the price, the financial strength of the provider and the level of service will be differentiators.