Buying Stocks and Shares for Beginners
The advent of the internet has made the buying and selling of shares a straightforward procedure. Someone can open an account and be share trading almost immediately.
The easiest way to trade shares on the internet is to sign up to a nominee account.
A nominee account is one in which the named holder ( i.e., the share dealing company ) holds the assets of the beneficiary. The broker is named as the owner of the shares but the client has beneficial ownership. Nominee accounts make settlement quicker, and the dealing costs lower. The disadvantages of having a nominee account are that you are not sent company reports and you have no voting rights.
An example of a nominee account is idealing.co.uk
Typical charges for an account may be as follows :-
Account maintenance charge:- £5 a quarter
0.5%(UK) stamp duty charged on value of shares
£9 charge for each deal
Any cash left in the account usually accrues a nominal rate of interest.
Charges above are typical, but there is a certain amount of variation between each account.
It must be remembered that some accounts may have seemingly low charges but when it comes to trade there is a wider spread between the bid and the ask price. What you gain on the swings you could lose on the roundabouts.
When signing up with a share dealing company, make sure that it is regulated by the FSA( Financial Shares Authority).
The FSA is the regulator of all providers of financial services in the UK.
It is recommended that the company you are considering using satisfies all of your requirements.