Is there any stock brokers that don't charge for trading?
Selftrade charge £12.50 per trade is there any free ones?
Asked by Stephanie M - 1 year ago
Answer:
No – this is how a stock broker generates most of their revenue to cover their costs and makes profit. The figure you quote is competitive in the market.
Stock brokers provide discounts the more trades you make and further discounts if you trade on-line.
In addition to the charge per trade some also charge to run an account.
In most cases a stock broking fee will be 1% of the purchase price subject to a minimum fee and capped, typically at £50. This would make trades of less than £1,250 proportionately more expensive. In these cases it may be better to consider using a fund such as a unit trust.
You can trade funds such as unit trusts free since brokers make their money through the annual management charges. You will also benefit from professional fund management and wider diversification – bear in mind a balanced portfolio would normally have around 20 share holdings and this could be provided in one fund.
Funds often suit those new to investing who are still building their portfolios and start from £50 per month on a regular savings basis or £1,000 as a lump sum.
Disclaimer:
The answers above are for guidance only and should not be acted upon without you receiving independent financial advice relevant to your circumstances. To find an IFA please go to http://www.unbiased.co.uk
Sources:
Danny Cox, Certified Financial Planner, Hargreaves Lansdown
Chartered Financial Planner, Certified Financial Planner and heads the advisory team at Hargreaves Lansdown. Danny is the Money Marketing Best Retirement Planner 2007 and Financial Adviser SIPP Adviser of the Year 2007.