Sidekick must take sufficient steps to obtain the best possible results for our customers when handling orders on their behalf. The primary factors to be taken into account are: price; costs; speed; likelihood of execution/settlement; size and nature.
This policy outlines Sidekick’s approach to meeting our ‘best execution’ obligations and consistentlyachieving good outcomes for our customers.
The Financial Conduct Authority (FCA) has a Conduct of Business Sourcebook (COBS) which requiresSidekick to document, maintain and publish a policy which explains how we take sufficient steps to achieve best execution. Chapter 11 within COBS covers these rules in detail and is referred to throughout this policy. Best execution is also a core obligation within MiFID2.
Sidekick takes decisions to trade on behalf of our clients in line with our discretionary mandate. This will typically mean that our orders are:
In the following types of financial instruments:
Executed via arrangements we have made with carefully selected partners in the UK and the US. We are satisfied that we have created an environment in which we can meet our ‘best execution’ responsibilities.
We will use the following order types:
The main exception to this will be when a customer withdraws assets from their portfolio (in full or in part). Whilst we would still take all reasonable steps to ensure the best possible result, the sell trade(s) would be prioritised by speed rather than the combination of any other factors. We define this as a ‘specific client instruction’. We do not otherwise accept self-directed client orders to trade.
In the event that any of these characteristics are no longer present (because of a change to our product range or business model), we will review and/or amend this policy and any related procedures at the earliest possible opportunity. Otherwise, this will be carried out on at least an annual basis.
Sidekick defines a good customer outcome for the purposes of our best execution responsibilities in terms of ‘Total Consideration’ which represents the price of the financial instrument being traded and the costs related to execution.
Sidekick’s customer pricing model is based around an ‘Assets under Management’ (AUM) annual fee. As a result, our customers are not directly impacted by any associated trading or transactional costs (except those relating to the customer’s own personal tax liabilities) although they are built into our wider pricing strategy.
We will always use our best endeavours to obtain the best possible price for our customers when we trade, we consider this to be the most important factor and will adopt this as the default priority.
The principle of best execution does not guarantee that the best price possible will be achieved for every single trade. In certain circumstances we may conclude that factors other than price (see below) are more important in achieving the best possible result. The relative importance of each of the factors will differ depending on the nature of the trade.
We will use our reasonable commercial judgement together with our understanding of the appropriate execution criteria when we trade on behalf of our clients.
In practice, we will predominantly route US and UK trades (where the company is listed and in which currency they trade) to our respective partners in those jurisdictions. Costs are not ordinarily a customer factor as transactional fees are already accounted for within our AUM structure. For the avoidance of doubt, we do not separately charge fees for foreign exchange.
Speed of execution is broadly similar between our partners - the main determining factor for our trading activity will be availability of our preferred asset classes. All trading activity will be closely analysed to ensure that we are able to identify any instances which would represent a material difference in customer outcome solely because of the role of the executing partner we have used.
When we are trading on the US market, there is a potential ‘gap’ risk which could occur if the underlying stock price moves in an unfavourable direction outside of Sidekick’s core UK business hours. The liquid nature of the assets in our client portfolios means that this is unlikely to result in a material loss - in any event, we will continually evaluate whether our operational processes are not in adherence with our best execution obligations.
Client orders will typically be combined and executed via our partners within a bulk trading arrangement. This helps Sidekick to manage the operational risks associated with the processing of multiple simultaneous client orders and reduces our overall costs.
It is extremely unlikely that the aggregation of orders will disadvantage our customers. Although individual trades within the bulk order will be executed at different prices, these are averaged out across the consolidated order and all clients will receive the same price per share/fractional share when the end portfolio positions are allocated.
In the event that an entire order cannot be filled, the customers within our bulk trading instruction will receive their allocation on a ‘pro rata’ basis. This represents a fair outcome to all customers. Typically, when trading in fractional shares, there will be very small remaining fractions(representing up to 8 decimal places of a whole share in some cases) which cannot be allocated exactly. Internally, we have determined a hierarchy of allocation which ensures that this is accounted for and no customers are disadvantaged.
Our chosen partners will execute Sidekick’s trades via multiple broker-dealers and other venues; inline with their own ‘best execution’ and other regulatory responsibilities.
Additional information is contained within the equivalent policies of partners which are available on our website.
Sidekick has put in place internal controls to monitor, on an ongoing basis, the effectiveness of the arrangements described within this policy.
We have implemented a transaction cost analysis solution3 which analyses our trading activity against a range of reference points, offering standardised metrics for internal assessments and comparisons against numerous industry-recognised benchmarks. This allows us to gain a comprehensive insight into the relative performance of our post-trade executions. This compares our execution price to the VWAP or “volume weighted average price” which represents the average price a given security has traded at throughout the day, based on both volume and price.
We have a regular standing agenda throughout our Governance structure to digest the results of our trade analysis and assess the results achieved for our clients compared to the pricing levels available in the wider market.
As part of the standard onboarding process, our customers provide their consent to our order handling policy (and those of our partners) via the Investment Management Agreement (IMA).
Sidekick Money Ltd is a company registered in England and Wales (No. 13882980). Sidekick Money Ltd is authorised and regulated by the Financial Conduct Authority (FRN 984829). Our address is Rivington House, 82 Great Eastern Street, London EC2A 3JF.
Payment and e-money services (Non MIFID related products) are provided by The Currency Cloud Limited. Registered in England No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorized by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN: 900199)
Sidekick Money Ltd also provides investment management and lending services. These are separate and unrelated to the account and payment services you receive from The Currency Cloud Limited.