Time to buy shares, but how? (UK)

August 8, 2011 1:06 PM

I'm looking to buy a few dozen shares in a small company that I am fond of. These are not really for investment, although I might buy shares in the future for investment. Can anyone recommend a UK online broker? The company itself is also UK-based.
posted by NoiselessPenguin to Work & Money (1 answer total)

Best answer: I have to say that buying shares in a firm just because you like the company may not be the best way of showing your support and that depending on the share price a few dozen shares might easily be made uneconomicial by the broker's commission ... however to answer your question:

First, to clarify, are you based in the UK? If you're not, you don't necessarily require a UK-based broker and it will probably be harder for you to open an account with one in the UK than to find one in your home country that will buy UK shares.

If you are, the cheapest online brokers that I know of in the UK at present are X-O and SVS Securities. You'll pay just under £6 a trade online with no extra annual fees at present. I haven't used either, but most of the comments I've heard about them are okay - especially X-O.

I hope it's okay for me to self-link on a question like this. I'm an investment journalist specialising in international investing and so I maintain a list of stock brokers in various countries who trade various markets on my website - you can find the UK part of the list here.

If you're simply looking for a UK-only broker for a single transaction, that won't add much to add to the above - you just want someone who is cheap, competent and legitimate (note that there are a couple of other brokers who are even cheaper than the two mentioned above, but they are Isle of Man companies and not properly FSA regulated and should be avoided in my view). However, if you want to look at brokers in more detail with a view to future investments, that table may give you a better overview of what's available.

(Mods, being relatively new here I've read the self-link guidelines and I assume that link is okay since it directly helps with the question, but if not please delete and let me know and I'll repost this answer with that bit removed.)

Personally, I've had acceptable service from Selftrade and still use them for some UK trades, but they are now rather expensive for an one-off online broker since they introduced a yearly account fee. TD Waterhouse are okay, but again you would pay an inactivity fee if you didn't trade at least once per quarter. I would probably avoid Barclays Stockbrokers. Not enough experience with most of the others to comment.

Actually, I haven't used them but if you plan to invest mostly in funds but with the occasional share purchase, Alliance Trust looks interesting, with both a very low-cost fund supermarket and a sharedealing service inside the same account.

If you are not in the UK but still want to open an account there, TD Waterhouse will now open accounts for non-residents. Unless you are a US citizen/resident, in which case finding a foreign brokerage that will accept you is extremely awkward these days. I'd suggest trying maybe E*Trade, who will trade UK shares (and a few other foreign markets). Interactive Brokers is the best US discount broker for international markets, but not a good choice if you don't have a fair bit of experience aready.

Realised this is quite a long answer ... I'm on Mefi tonight for a break from watching the riots ...
posted by Temagami at 3:22 PM on August 8, 2011 [1 favorite]