‘Stockbrokers offer cut-price share trades’
SUNDAY TIMES ONLINE - 28/09/03

By Clare Francis

The FTSE 100 share index has risen 11.7% over the past six months, tempting investors back into the market.

Compeer, a share-dealing analyst, reported a 42% increase in online trading volumes between April and June.

Damion Larkin of The Share Centre, a stockbroker, says: “The recent upturn has woken up dormant investors who are buying shares again. Investors who have continued trading over the past three years are taking more risks by buying growth and cyclical stocks, such as chemical companies. They are also selling defensive shares such as food producers to try to maximise gains.”

Some stockbrokers offer both execution-only – without advice – and advisory services, although if you do seek guidance your trading costs are likely to be at least twice as high.

For example, Barclays Stockbrokers charge a flat fee of £17.50 for online trades; if you use the advisory service you will pay a minimum of £50.

Not all stockbrokers offer both types of service, however. TD Waterhouse, which does not offer advice, has launched a campaign aimed at poaching new clients from rival firms.

Investors who transfer ISAs, PEPs or self-invested personal pensions will qualify for up to four months of commission-free trading, plus £10 cashback for every stock they switch.

Before you move all your holdings to the company, work out whether it will be the most cost-effective option over the longer term. TD Waterhouse charges £11.95 per transaction, but a number of other services offer lower dealing costs. ShareCrazy charges £9, whilst Jarvis Investment Management, Saga Share Direct and Abbey are all around the £10 mark.

TD Waterhouse levies an inactivity fee of £10 plus VAT if three months elapse and you make no trades.

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