City firms are slow to trade on the Internet

IN THE United States, shares and units in hundreds of companies and mutual funds, the American equivalent of unit trusts, are bought and sold over the Internet by private investors every working day.

In the UK, the use of the Internet for investment is still in its infancy. Even the introduction of individual savings accounts in April, which allows for electronic commerce, has done little to change the situation.

But you will find using the Internet for investment difficult, unless you want to trade directly in stocks and shares. Only a handful of fund managers have set up facilities for those who want to buy equity-based ISAs over the Internet. These include Fidelity, Johnson Fry, and M&G, where you can buy any of their funds and NetISA (formerly NetPEP) which offers a tracker fund.

Buying a NetISA electronically is simple. You call the company on the net then fill in the application form on the screen including your National Insurance number. Payment can be made immediately by using a Switch or Delta direct debit card, or you can send a cheque through the post.

"Anyone uses the Internet for shopping will see that buying an ISA from us is just as easy," says Tessa Murray of M&G. "Many investment groups were not ready with their product range when the ISA era began on 6 April."

Using the Internet with these few groups works only for lump sum investments. If you want to buy an ISA through a monthly savings plan, banks will accept direct debit instructions only if they have your signature, so you will have to download the relevant form, fill it in by hand and send it off - so much for new technology.

When it comes to buying and selling funds, then if you want to use your PC, your choice is severely limited. Until recently, only Fidelity, through its WebXpress service, allowed this. And it registers 10,000 to 20,000 hits a week since it commenced service a year ago.

In the past couple of months, Johnson Fry has begun to offer a similar facility. You access its main sites, enter the sub-site, fill in the form on screen, type in a Pin-type number of your choice and a password, send it back to the managers and you're ready to go.

"With our system, customers can list their individual details on screen," says Zach Leonard of Fidelity. "If they use independent financial advisers (IFAs), they can also access the site. They can see their holdings, get valuations, split them into sectors, get geographical breakdowns, have the latest view of the fund managers, whatever and whenever they want. But most important, they can buy, sell or switch their investments between our funds."

Fidelity and now Johnson Fry are in the forefront of Internet developments for unit trust and OEIC investors. Autif, the trade body for the management groups, has a committee made up of representatives from Fidelity, Gartmore, M&G, Perpetual and Schroders, looking at how the industry can catch up and make more use of the Internet for direct trading. "By the end of the year, we hope to have a pilot scheme for the leading IFAs, which we can broaden out next year," says Anne McMeehan of Autif.

Many leading groups have websites. You can find them by typing in www.company name.co.uk. These will show the basic details of their funds, and many will have an application form you can download for printing. You can also try the Autif website, which links you to those groups with their own sites. Surprisingly, many still do not have a website. Under the initial A alone, those include Abbey, Abbey National, Aberforth, ABN Amro, AIB Govett, AE Sharp and Axa Sun Life. Another leading group still without a presence on the Internet is Jupiter but its spokesman, James Harris, says this will be remedied within a fortnight, providing basic information and application forms that can be printed. "We decided not introduce screen trading until possibly later this year," he says.

Many have delayed developing their use of the Internet,citing the need to get ready for ISAs and the overhaul of their systems to prevent any impact from the millennium bug.

"But there are three other main reasons," says Lindsay Firth-McGuckin, of Johnson Fry. "Most groups are worried about safety of information, not understanding how secure systems are; they also worry about how IFAs will react if clients deal directly with fund managers; but most important is lack of will at the top. Most groups are run by middle-aged men who can't type and can't see the benefits of the Internet." Daniel Godfrey, director general of the AITC, the industry's trade body, says: "Our members' funds are traded on the Stock Exchange, so you can buy them cheaply and quickly through any of the execution- only broking services available on the Internet."

Barclays Stockbrokers and Charles Schwab Europe are the leaders in offering real-time dealing services. They are easy to join on screen and allow you to trade in shares and investment trusts. Costs are similar to other execution-only services, around pounds 60 for a pounds 5,000 deal. But Internet trading is likely to become cheaper.

"Transaction costs are between a tenth and fifth of those for using phone services," says Zach Leonard.

Contacts: www.fidelity. co.uk.; www.mandg.co.uk.; www.netisa.co.uk.; www. johnsonfry.co.uk.; www. autif. co.uk.; www.aitc.co.uk.; www.barclays- stockbrokers.co.uk.; www.schwab-europe.com.

Start your day with The Independent, sign up for daily news emails
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
news
PROMOTED VIDEO
News
i100
Sport
Robin van Persie scores the third for Manchester United with a perfectly-guided header
footballLive! Chelsea vs West Ham kicked off 10 Boxing Day matches, with Arsenal vs QPR closing the action
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
Sport
football
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all