Boss Lady

Stock broker comparison: Factors to consider when choosing one

on

This short guide outlines how to do a stock broker comparison and the factors you should take into account before you choose a broker.

A stockbroker links customers to stock markets, allowing them to purchase and sell public company shares while also managing their investments accounts.  Your choice of brokerage service, financial service provider, or middleman will often be influenced by your circumstances, needs, and expectations. Many factors will determine the best stockbroker or share dealing service.

If you have a big investment portfolio that you would like managed for you, the result of your stock broker comparison will likely be going for a different stockbroker than an investor who has a smaller portfolio. It’s relatively easy to do a stock broker comparison of fees and charges, but the cheapest stock broker won’t always provide the greatest service for your needs.

Stock broker comparison factors

Fees and charges

Account holding fees – certain stockbrokers may charge you a setup fee or a monthly subscription if your account is dormant. Check out each one in a stock broker comparison before committing to a live account, especially if you are just planning on making a few trades or acquiring shares on a regular basis.

Transaction fees – Most brokers will charge you for each trade you make because here is when they start incurring costs. Check to see if the brokers you’re considering impose these fees, who has the best prices, and if the fees reduce as you trade more frequently (sometimes referred to as frequent trader discounts).

Commission – Some brokers will levy a commission on your transactions. This might be charged as a fraction of the trade profit or a percentage of the whole order value. Brokers often charge this on managed or advisory accounts, and they play an active role in guiding you in profiting from your stock market transactions and investments.

Services

Each brokerage has its own set of features, research tools, and tools to help people make trades, so explore these in a stock broker comparison. As well as a variety of layouts, styles, and forms of market access. Stockbrokers generally offer three different categories of services based on a client’s categorization, which are as follows:

Execution only: Under execution, a customer makes all of their own investing decisions, and their stockbroker just acts as their agent, executing and settling deals. The broker will also give contract notes, account statements, and online or phone access to an order routing service to clients.

Discretionary: A client who chooses discretionary management turns over control of their investment portfolio to their broker. These days, a stockbroker’s wealth management section is generally in charge of this business.

Advisory: Not all stockbrokers provide advisory services since it demands a specialized, highly qualified personnel and a higher level of compliance. Those that do will typically charge more for this service than they would for a simple execution.

Before creating an account, prospective clients will be required to complete thorough questionnaires that will help measure and analyse their investing goals, risk tolerance, and other factors. The broker will try to match those investment goals and risk tolerances with their recommendations.

Clients will have a specific point of contact or advisers at the broker for advisory services, which are more personal than execution-only services. It should be noted, however, that accessing these services will almost certainly need some amount of investment or work.

Robo Investing: To help you manage your assets, several brokers now provide Robo-advisors or Robo-investing software in their brokerage accounts. When you join up for a Robo-investing service, you’ll usually be given a pre-packaged set of funds to invest in depending on your response to a questionnaire.

Interactive investor

Interactive Investor is a long-established stock broker that provides a comprehensive range of services in the United Kingdom, where they are well-regulated by the Financial Conduct Authority (FCA) for the most reliable experience. Since its inception in 1995, the broker has been a popular choice.

Depending on your account type, Interactive Investor charges a set monthly cost ranging from £9.99 to £19.99. Again, depending on the asset, the trading charge ranges from £3.99 to £7.99, with a cost of £15 applied to urgent withdrawals that might come the same day. There are no charges for deposits.

Interactive brokers

Interactive Brokers is one of the most prominent names in the world of online stock trading. They are also one of the most reputable companies in the business, having been in operation since 1978. Their UK operation is regulated by the FCA, so you can expect the same high level of service here.

IB UK offers tiered or set price options. The charge for tiered pricing starts at 0.05 percent of the trade value, with a £1 minimum. Up to £50,000, the fixed system charges £6 each trade, and £6 + 0.05 percent over that. Inactivity fines vary from $3 per month for individuals under 25 to $20 per month for those earning less than $20 commission.

Stake

Stake is our current top selection since it allows users to trade over 3,800 US stocks and ETFs directly from the UK on key US stock exchanges including the NASDAQ and NYSE. The bulk of the world’s tech stocks are traded on these exchanges, which provides traders in the United Kingdom with a wealth of opportunities.

In terms of trading costs, you may make as many transactions as you want without having to pay any brokerage fees. The best part is that there are no commissions and no foreign exchange fees on deals. Whatever your needs are, there are a few simple guidelines to follow for a stock broker comparison when choosing the best stock brokers UK.

About Jill Wells

jillw@thebusinesswomanmedia.com'

Jill Wells is a business analyst specialising in research and advice on how to make the most of today’s changing business climate.

Recommended for you