How do I actually buy shares?

by Iain
(UK)

Having used Stockopedia to identify a specific stock to invest in, what site / brokerage tool would you recommend for me to actually use to invest my money in that stock from the UK ?

Thanks.


Answer from William John


Hi Iain, I have used ii.co.uk for my investments and they've been pretty good. The fees aren't the lowest - at time of writing they charge £10 per trade £22.50 per quarter as a standing charge, but this gets credited to your account for their dealing fees, effectively it's a minimum. Their phone support has been very good - they have solved a number of issues I've had quickly and easily. Only one such call needed any sort of follow up.

I haven't used their research tools, as I too am a fan of Stockopedia and my mentor Mike has recommended that I always treat cautiously advice supplied by brokers who stand to gain if I trade.

I know Mike has had experience with Lansdown Hargreaves Landsdown (www.hl.co.uk), but I'll leave him to add his comment on how they've been below...

Whichever brokerage you decide to start with, make sure that you're using your full UK ISA allowance as this allows you to keep any profits and dividends tax free. (One of the issues I had when I started was that I accidentally opened a non-ISA account... Silly mistake!)

Finally, do take a look at the pages listed under the "Finding a Brokerage" tab on the top right of each page...

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Nov 11, 2018
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by: Mike

Hi Iain,

This is a great question and there are several options. For me, the most important thing is safety and I am happy to pay a little more for a reputable company. Remember that in the UK, you have some protection from the FSCS under their compensation scheme (currently £50,000 for investment accounts and £85,000 for savings accounts) but it would still be a stressful experience for your broker to go out of business. It is generally quite uncommon but it did happen earlier this year with a company called Beaufort Securities.

William mentioned Hargreaves Lansdown. This is the biggest broker in the UK to retail clients with a good track record and excellent customer service. They aren't the cheapest and currently charge you £11.95 per trade to deal in UK shares. They will also charge you 0.45% (up to £45 per year) to hold an ISA with them.

William also mentioned interactive investor. They are now the second largest UK retail broker and charge £90 per year (which you get back in credits if you deal) and £10 per trade up to a value of £100. I have an account with them as I think they are great for international shares. They allow you to invest in a number of overseas markets and keep the dividends in their respective currencies so you don't need to keep doing currency trades (saving you money). They also just abolished their transfer out fees meaning it would be free for you to move your shares to another provider if you left them.

If you want a cheap option, then I'd recommend a company called X-O.co.uk They have no administration charge and just a simple charge of £5.95 per trade. It is actually owned by a company called Jarvis that is listed and (in my opinion) well run and managed.

Other good options can include the likes of AJ Bell, Charles Stanley Direct, and HSBC Investdirect (I have accounts with the latter two). Feel free to have a look around and then go ahead and open an account with your favourite!

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