Kiss that broker goodbye

Buying and selling shares has never been easier, David Prosser says. Simply turn on your PC, hook up to the Internet, and (hopefully) watch your investments soar
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The Independent Online
Fed up with your fuddy-duddy old stockbroker charging too much for an appalling service? Help is at hand. If you know which stocks you want to trade and you have access to a PC, do the deal on the Internet, where there are now three brokers that accept dealing instructions online.

Dealing over the Internet is no riskier than popping into your local bank branch or trading over the phone. To trade online, register with one of the two companies that offer links to the online stockbrokers. Through Infotrade (www.infotrade.co.uk), you can deal with ShareLink, Stocktrade or Cater Deal. If you use the ESI (www.esi.co.uk) service, you can only use ShareLink or Stocktrade.

Both services offer research and portfolio management facilities as well as dealing, though none of the brokers offer online advice. For this reason, online share dealing is not for novice investors, and investors not used to stock market trading should take advice before dealing, a service not available online.

ESI's package is completely Internet-based. With Infotrade, you download software to your computer and then dial up the Infotrade Web site to update the software and to trade. This, argues Infotrade, makes its service cheaper because you can use its facilities without worrying about running up a mammoth phone bill.

In fact, which service works out the cheapest depends on which facilities you use and how often you deal. Infotrade charges pounds 14.70 per month for its services, plus access to the Internet. ESI's basic service is free - you only pay the costs of the phone call. More comprehensive facilities are available through ESI's bronze service, costing pounds 5 per month and its silver service, at pounds 20 per month.

The idea with both Infotrade and ESI is that you shop around between the brokers on the sites to find the cheapest service for you. For example, through Infotrade, over a year, 12 deals worth pounds 3,000 each on the minimum service required for dealing would cost pounds 441 with Cater Deal and pounds 510 with ShareLink, including all commissions and fees.

Dealing is similar to trading over the telephone. First, you have to open an account with a broker. Then you key in your order, specifying the stock you want to trade and how many shares you want to buy or sell. Finally, the broker will send you a confirmation note in the post.

However, dealing online does have advantages. Not least, there's no waiting around for someone to answer the phone. Dealing online is also cheaper, because your broker doesn't have to pay a telephone operator. Another plus is that you can deal at any time of the day, although orders will only be carried out when the stock market is open.

The other attraction of online dealing is the extra services that ESI and Infotrade provide. Infotrade, for example, can keep track of your portfolio, updating its value as share prices change or you deal. ESI offers a database of news stories on leading stocks.

However, there is the question of security, the fear that someone will hack into the system and pinch cash from your account. Both ESI and Infotrade maintain that thanks to a system of passwords and information encryption, they're safe from hackers. And, they point out, it is only your dealing instructions that are moving around the Internet. Your account details are on a different system.

Nevertheless, concern about security does put many investors off online dealing. If you are one, do not give up on your computer: you can still cut down on time spent talking to your broker by pulling off as much information as possible from Internet sites on both the fundamental finances of companies and share prices.

Two Web sites update share prices throughout the day with prices that are just 20 minutes out of date. Investment software company Updata (www.updata.co.uk) and personal finance Internet specialist MoneyWorld (www.moneyworld. co.uk/stocks) provide these services at no cost. For a fee (see above) you can also get real-time share prices from ESI and Infotrade.

If it is financial data on companies that you are after, try Hemmington Scott's Internet site (www.hemscott.co.uk), which carries much of the data included in the Hambro Company Guide, the popular reference book on UK public companies. The Financial Times (www.ft.com) site also offers one-page summaries of key financial data on more than 11,000 worldwide companies.

It is worth looking at Internet sites run by stockbrokers and the individual companies themselves. Many of them carry annual reports, company histories and press releases

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