Go it alone or get some help, your Stockbroker
offers services not generally available across other trading
There are three different types of stockbroking accounts
available to the retail and professional investor.
This is where the broker carries out the client's instructions
to buy or sell. All trading decisions are that of the client and
the broker will not provide advice.
Tip: This service is perfect for those who are
happy to make their own way in the markets and would rather do
their own research.
2. Advisory dealing
This is where the broker advises the client on which shares to
buy and sell, leaving the client to decide whether to actually buy
or sell and at a price and time of their choosing.
Tip: As with anything in life, advice is only
as good as the person giving it to you. If you do decide to go down
this route, make sure you research the firm you are using and where
possible get to know the person who will be offering you this
advice and ensure that they have the required market
3. Discretionary dealing
This is where the stockbroker meets with the client to gain an
understanding of their investment objectives and then makes all
dealing decisions on the client's behalf with no further reference
to the client other than to notify them of the trades that have
been placed on their behalf together with a daily running profit
Tip: This is a major step for any investor.
Taking advice about which stock to buy or sell is one thing but
entrusting your money to someone to actually make these decisions
on your behalf is another matter. That said, we all engage in
disrectionary trading when we invest into a personal pension fund
and so providing you research the company you intend using this
shouldn't be a service that you should discount, especially if you
don't have the time to place the trades yourself.
Take your time and ask plenty of questions.
When it comes to choosing which type of account that is suitable
and more importantly which stock broker to use for this
service it is important to spend some time reviewing the options
available to you.
Execution only services are going to be the most cost effective
way of dealing but as mentioned above this requires all decisions
to be undertaken by you with no assistance given by the broker.
The advisory service is often the preferred route where the
stock broker offers some assistance with the stock selection
and is able to provide access to advanced research about the
stock that may not always be available to the general public.
Most of us entrust our money with people we don't know when we
invest in pensions but only after we have researched the company
beforehand and reviewed figures showing past performance, the same
practice should be adopted if and when you decide to use a
discretionary service with a stock broker.
Further resources on Share trading
Our comparison table below looks at a few of the criteria that
we believe are important to consider when choosing which stock
broker to use. If you would like us to find out any further
information about a broker listed here, or perhaps one that isn't,
please get in touch and we will be delighted to assist you.
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