You are here: Home > Saving & Investing > How do I buy shares? Print this page

How do I buy shares?

Buying shares can be fun - honest!

If you’re investing in individual shares you’ll need to do it through a third party – either a bank, a broker, an Independent Financial Adviser (IFA) or an online dealer. With all of these, by the way, if you want your investment wrapped in an ISA, you only have to say. Find the best buy ISAs here.

If you know what you want to buy and you don’t need any advice on it, you should ask for what is know as an ‘execution only’ service. That means they’ll do the buying or selling for you but they won’t tell you whether they think it’s a good idea or not. You will still have to pay for this service but not too much, particularly if you do it through one of the really cheap online brokers which are certainly the quickest and best value way to go.

If you lack confidence in your ability to pick stocks you should go for an ‘advisory service’ which costs a lot more than the ‘execution only’ one, but then you do get more of an actual service. This tends to be offered by private client stockbrokers who have posh offices and expensive suits. They will recommend which shares you should buy or sell and will probably contact you every now and then with further recommendations.

If you can afford one of the better stockbrokers (before signing anything ask for proof of performance over the past 5 years) you could have a ‘discretionary service’ where you just hand over your money to them and let them buy and sell shares on your behalf without bothering you about it. N.B. as a rule of thumb you need an investment pot of at least £30,000 before they will deign to even look at you!

As they do this for a living, you would expect professional stockbrokers to know a thing or two about the market, and some of them do, although remember that generally they’re called a ‘broker’ because when you use one – you are.

If you still want your very own stockbroker to keep and love and cherish, ring the public information department at the London Stock Exchange on 020 7588 2355 for a list of them or go to: www.londonstockexchange.com/en-gb/pricesnews/investorcentrehomeNEW.htm

Jasmine and the Moneymagpie team
Moneymagpie Moneypedia
14.02.2008