A new way to go for broking

Internet Investor

A new broking service has been launched for investors in the London market. Xest, a division of Charles Stanley Stockbrokers, has set up an execution-only share trading service in conjunction with Electronic Share Information (ESI).

Xest charges a flat fee of pounds 20 per transaction. A specially tailored package of market information from ESI is built into the Xest website, including share prices - real time or 20 minute delayed; personal portfolio management - the ability to store and value automatically; charting - stock charts per share; and news.

You are required to deposit funds in a Xest cash management account, which would earn interest at stepped rates starting at 5.25 per cent. Trading orders are authorised by a personal identification number and are immediately followed by e-mail confirmation.

Unlike the other three UK brokers offering internet dealing, Xest includes sponsored membership of the Stock Exchange's Crest electronic settlement system. Crest is the computerised system for tidying up or "settling" purchases and sales of shares. Xest makes an extra charge for Crest membership, an annual fee of pounds 45, discounted to pounds 20 for the first year.

The main advantage of Crest membership rather than using a nominee account, is that you are the direct beneficiary of voting rights and any share benefits. However, if using a nominee account does not bother you then other services may be cheaper.

While there may only be four UK brokers offering net services now, the number is likely to grow. Information provider Datastream/ICV, which operates the Topic 3 system for City traders, has signed agreements in principle with at least two stockbrokers to link them to its Market-Eye internet site. The company hopes to link the brokers' computers direct to its website and the Stock Exchange settlement system. Datastream believes this could cut in half the cost of straightforward execution-only deals.

The Market-Eye Internet Premium service provides real-time prices for UK shares, gilts and derivatives together with a comprehensive news service, both real-time and historical. The service is also linked to Datastream's historical database. This allows you access to company accounts and historical price performance.

The Market-Eye Internet Premium service costs pounds 10 a month, rising to pounds 20 per month in January. These prices are significantly below those the company charges for exactly the same information to its professional clients in the Square Mile.

The new Premium service comes as an addition to existing delayed price information and news available free to investors at Market-Eye's website which was only launched in July this year.

If you do not need real-time share prices, several sites offer you access to time-delayed prices. That is, you see prices which are 20 minutes old. If you are looking for a good source of information on companies, you should check out the site run by publisher Hemmington Scott.

This is the company which produces the Hambro Company Guide and Company Refs. All the information in these reference books is available free online. The website includes results, share price histories and broker comment and forecasts on all the quoted UK companies.

In general, service charges in the UK still have a long way to go to match those on offer in the US, where online share dealing is already estimated to be worth more than pounds 60bn a year.

Just how cheap are some of the services available in the US market? Would you believe free? Not so much low-cost as no-cost. Florida-based Empire Financial Group is now offering free execution-only trades to its clients. There are, however, some conditions. You must have funds on deposit with the brokerage and purchase a minimum of 1,000 shares worth at least $5 each.

Of course, the US market is different. There is much greater active individual participation in share trading and, therefore, much greater demand for low-cost dealing facilities.

Xest: www.xest.com

Market-Eye: www.marketeye. co.uk

Hemmington Scott: www. hemscott.co.uk

Empire Financial: www.lowfees. com