A new age in financial shopping

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The Independent Online
Never mind Tesco and Sainsbury. A new breed of supermarket is coming our way. These stores will sell a wide range of investment and insurance products. And they will indeed pile them high and sell them cheap.

All this action will take place online. Yet again, the best deals are only on offer to those with net access (see page 8 for online savings accounts). The Prudential's Egg and American share dealing giant Charles Schwab are both well advanced with plans for online supermarkets. Have a look at Schwab's American website (www.schwab. com) to get an idea of how the concept works. You select any type of mutual fund (their equivalent of unit trusts) and see the best performers at a glance. US users can then click to buy, paying 0.7 per cent commission on purchases up to about pounds 9,000 and 0.2 per cent on top of that.

As a comparison, buying through a UK independent financial adviser (IFA) or direct from a management house wipes out 5 to 6 per cent of your investment right away.

Schwab also sells life insurance and bonds. And all this on top of online share dealing, the hip hobby for affluent Americans. (Although mere dealing is no longer enough - last week the International Herald Tribune reported on a Seattle housewife who dabbles in dollar/yen deals on the foreign exchange markets).

Over here there are several online operators planning to offer mortgages on- line. The day is not far off when we will be able to type in our loan requirements and lenders will bid for our business.

These developments will mean cheaper, quicker access to financial deals for us. Plenty of people still want to buy from an adviser, face to face. But they will simply have to pay more for the privilege, probably through upfront fees. Good advice should cost you money.

I have just one reservation about financial supermarkets. Will the tech- nology work? I put my bullish views about the net into practice by searching for home insurance online. A broker at www.screentrade. co.uk told me it couldn't offer a quote for my decidedly unleafy part of north London. I persisted and it did eventually offer a deal - which could only be bought over the phone. Nobody answered.

I did a little bit of old-fashioned phone-bashing instead, and got some insurance (plus a lovely free key ring) at half the online price.

Even so, I won't be put off, and will be queuing up as soon as the first supermarket opens, probably later this year.