The best online stock broker in the United Kingdom has similarities, but the difference comes across in their charges. They have realized that the best performing trading systems will not cut it; the best customer support service will not cover it all rather the charges they impose on their clients will play the biggest role.
Many firms have restructured their share dealing price to accommodate the growing competition in the business. The more the competition grows, the lower the share dealing prices drop, this is an advantage for the traders since they now have a choice and that is where everything becomes complicated for the trader.
With the lower share dealing prices and other charges attached to trading shares it is very easy for the trader to have a hard time making the decision on which broker to go with, and that is where there is a need for information to avoid such a situation from happening.
Share Dealing Terms
There are various things, that will act as a marker for good share dealing prices; there are terminologies that are easy to understand that are related to sharing dealing.
These are what every trader should be looking out for when trading especially for the active traders. The following are terminologies attached to share dealing; it is important to know these terms for they will help you make a wiser decision in the long run. These terms are:
- Standard rates: these represent the charges incurred for trading United Kingdom stocks only. These charges should not be thought as blanket charges because they do not cover international stocks and telephone orders. The trader should know this beforehand and inquiring for further clarification from your broker will give you a higher chance of making the right decision.
- Discounted rates: these are charges that are also reduced commissions for traders who are active in the markets or who hold large accounts. This gives the trader the urge to carry on with their trading activities more frequently so as to be subject to these discount commissions. These charges are only effective for United Kingdom stocks only; international stock trading carries their standard rates and extra charges depending on the broker.
- Reinvestment dividend: these are reduced rates received on one’s account for automatically reinvesting the dividends of a particular share back into the company that awarded those dividends. This can be very useful for the active trader because it will be one more reduced charge, and hence you get to keep most of your profits.
- Regular investing: this charge is based on getting a discount whenever the trader makes a scheduled investment on a particular share at a pre-arranged time. This is one way of cutting your costs while trading and it is important to check if your broker has this incentive in their list of charges.
- Standard account fees: these are administrative costs linked to a standard account; there are extra charges for the normal administrative cost.There is the inactivity fee which is charged to accounts that have not been operational either on a quarterly basis or an annual based on your broker; the other charge is the custody fee. These charges do not apply to the ISA and SIPP accounts.
- ISA fees: these are similar charges applied to the standard account, but they are charged on an ISA account and the charges are made on an annual basis.
- SIPP fees: these are the same charges applied to the ISA account, but now they are expressed on the SIPP account.
- Further charges include the transfer out fees, minimum account size, non-standard services, restrictions, one-off fees and other notes.
Online Stock Broker’s in the UK
The following are some of the top brokers in the United Kingdom and some of the charges they have for operating an account with them.
It should be noted that all charges are denoted in pounds and all the brokerage firms outlined are from the United Kingdom and some are stock broking firms from other countries but have registered their stock broking business in the United Kingdom
Barclays Stock Broker
They have a discounted rate based on the number of trades taken, for the active trader who has made over twenty trades the get to pay 5.95 pounds per deal taken. The next discounted rate is for those traders who have made 10-19 trades, and they are charged 8.95 pounds per trade.
There is an account fee of 14.4 pounds with the VAT inclusive this fee is however passed over if the trader deals at least once a month. They have a 46.5-pound charge which is inclusive of the VAT fee; this is charged for their SIPP account, and this paid every quarter.
Their transfer out fee for a standard account is 72 pounds VAT inclusive, of the ISA account it is 120 pounds, and as for the SIPP account it is 180 pounds all the charges are VAT inclusive.
Hargreaves Lansdown Stock Broker
This broker has a discounted fee based on the number of trades you make which is fair. They charge 5.95 for traders who have made over 20 trades, 8.95 pounds for trades between 10-19, and lastly 11.95 pounds for traders who have made less than 10 trades.
They have an ISA fee based on the percentage of you account at 0.45%, but the maximum charge is 45 pounds. The SIPP charge is also set at 0.45% at a maximum of 200 pounds. They have a corporate action processing fee of 12 pounds which is VAT inclusive, and the shareholder’s instructions are required by the broker.
Their transfer out charges are all covered as one for the standard, ISA, SIPP accounts; they have a 25 pound per holding transfer fee in addition to that there is a 30-pound closure fee which has VAT included.