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And the winners are...

Created:
17 August 2006

These are our best buys for 2006, based on price. But broking services - even at the most hands-on online level - differentiate themselves in more ways than through cost alone, so those brokers selected below on price represent a starting point, rather than a conclusive or exhaustive list.

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ONLINE

Prices continue to fall in this most competitive of broking arenas. But while some propositions are refreshingly straightforward, most of the lowest headline rates are more complex, involving either a minimum number of trades per quarter to qualify for the best deal, or a quarterly admin fee. If you trade regularly, see frequent trader selection, below. For occasional trades, though, the following offer the lowest-cost deals:

  • Hoodless Brennan: £7
  • E*Trade: £8.95
  • Sharecrazy Trader: £9
  • Jarvis IM: £9.50
  • IDealing.com: £9.90
  • Iweb Share Dealing: £10
  • Fyshe Horton Finney: £10

If you want to build up a long-term portfolio through regular savings, the Halifax Sharebuilder scheme (from £20pm) offers batch (not real-time) share purchases for only £1.50.

FREQUENT TRADERS

Researcher ComPeer's latest report shows that 30 per cent of nominee clients traded more than 30 times in the first quarter of 2006, and there may be more cost-effective alternatives for these frequent traders. So our figures in brackets below show how many times per quarter you would need to trade for each option to be cheaper than a straight £9 flat fee such as that offered by Sharecrazy Trader.  

  • Jarvis IM Sharegain: £5.95 per trade plus £10/month admin (12 trades per quarter to undercut £9 flat fee, or 30 trades/qtr to undercut Hoodless Brennan's £7 flat fee)
  • E*Trade Securities: £6.95, after 30 deals/qtr at £8.95 (undercuts £9 flat fee from the outset, but only significant savings after 30 deals/qtr)
  • HSBC InvestDirect Plus: £6.95 after nine deals/qtr at £11.95 (22 trades/qtr to undercut £9 flat fee)
  • Barclays Stockbrokers: £7.50 after 10 deals/qtr at £12 (undercuts £9 flat fee after 30 deals/qtr)

PHONE/POSTAL SERVICES

It can be hard to disentangle best-value offerings here, as the choice comprises a mix of percentage fees, flat rates and stepped flat rates rising with the value of the bargain.

Across the board, simple flat rates (typically with an internet option at the same price) are clear price leaders:

  • Jarvis: £9.50
  • SelfTrade: £12.50
  • E*Trade: £14.95 (monthly admin fee waived if you deal more than wice in six months)

But others may also be worth considering:

  • The Share Centre is good value for trades under £1,000 because of its low minimum commission (£2.50).
  • Abbey Sharedealing, Halifax Share Dealing and HSBC Stockbrokers all charge £15 on up to £2,500.

For larger-value bargains, Arnold Stansby's £25 flat fee is worth considering if you'll deal more than 20 times a year.

Look out also for capped commissions: Abbey's maximum commission is £45 (above £10k), Goy Harris Cartright's is £50 (above £5k), Midas's is £50 (above £6,250). Some, such as TD Waterhouse, offer frequent trader flat rates worth comparing, but again watch out for quarterly admin charges.

DEALING WITH ADVICE

These commissions are mostly worked out on a tiered percentage basis, so the best value depends on bargain size. Some firms offer advice at no extra charge to execution-only clients, but Share Centre is the only one with a cheap flat fee online/phone option.

  • ADM Securities: 0.5 per cent on first £50,000, 0.25 per cent thereafter
  • Midas Investment Management/MiDeal: £20 on first £2,000, 1 per cent on next £8,000, 0.45 per cent thereafter
  • Cave & Sons: 1.3 per cent on first £10k, 0.4 per cent on next £10k, 0.2 per cent thereafter

The Share Centre runs a free AdviceLine for execution-only customers

INTERNATIONAL

There's increasing choice of service here, but check whether your broker offers decent research or analysis for overseas stocks, as well as a competitive price. Some only offer stocks tradable in sterling (IRS stocks) - these are likely to be traded at UK rates. Many firms charge the same as for UK markets, but they may add an overseas brokerage or admin fee, and/or pass on the third-party costs to clients, so look out for such hidden costs. For good value execution only deals without any extra international charges look at:

  • E*Trade for the US (flat fee $19,99, or $9.99 above 30 trades/qtr)
  • Fastrade (£9.99 on trades up to £1.5k, £14.99 thereafter)
  • Halifax Share Dealing (£17.50 online, £20 phone)
  • Idealing (£9.90)
  • Iweb (US trades £15)
  • Lloyds TSB Shareview (£15 online)
  • SelfTrade  (IRS stocks £12.50)
  • Sharecrazy.com (CDIs £9)

For a detailed table of rates, charges and services for all UK stock brokers, click on the following links. These are substantial PDF files, so plese be patient when downloading.

  • For dealing with advice, and international brokers, click here
  • For online and execution only brokers, click here
  • For nominee account brokers and portfolio managers, click here
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