Dial-a-deal, and let your fingers do the broking

or investment products from your armchair. Here and on pages 16 to 17 we look at the pros and cons of direct selling by phone or PC

Stockbrokers aren't all pin-striped gents sipping brandy in exclusive clubs. The brokers who handle most private investors' deals these days look more like telephone operators, due to the rapid growth of "execution- only" - no advice - stockbroking over the past 10 years.

Execution-only brokers do just what the title implies: they only carry out your buying and selling. If you want advice on which shares to buy and sell, you'll have to go elsewhere. Many investors, however, know exactly what they want to trade and don't want to pay a stockbroker for unwanted advice.

A big attraction of execution-only stockbroking is that it is easy. It is available in many branches of the high-street banks. Most stockbrokers offer postal dealing services. Or you can trade from home via the phone.

To buy and sell by phone, you need to set up an account.Richard Hunter, head of dealing at NatWest Stockbrokers, says: "With most brokers you can set up an account over the telephone very quickly. You can go from having no relationship with a broker to being able to deal within half an hour."

Once your account is up and running, you can trade as often as you wish; all you have to do is phone your broker and tell him to carry out the transaction. The broker will tell you the price at which the shares are trading and will then send you a contract note to confirm the details.

You can even deal outside the market's official opening hours. Many brokers will accept deals by phone at any hour and then trade when the market next opens. This, says Mr Hunter, is "the Martini effect - dealing any time, any place, anywhere".

Execution-only brokers are also cheap. Birmingham-based ShareLink, the UK's largest execution-only broker, charges pounds 10 to buy pounds 1,000 of shares. A traditional advice-based broker might charge pounds 25 or more. At CaterDeal, owned by Abbey National, you would also pay pounds 10 for the trade; at Sharemarket, it would cost pounds 9.

How do you hold your shares? Basically, you have two choices: either you opt to be sent paper share certificates, or you hold your shares through the broker's nominee company.

Both approaches have disadvantages. The trouble with holding certificates is that when you sell your shares, you have to send them to your broker and complete some tedious paperwork. Investors who use nominee companies may lose some shareholders' rights, such as receiving a company's annual report and accounts. But anyone who deals regularly - once a month or more - will probably find it easier to use the nominee option. For occasional investors, paper certificates should be satisfactory.

Other than this, phone broking is dilemma free - you'll probably never even meet your broker. Guy Knight, ShareLink's marketing director, says: "There's no reason for customers to come to Birmingham to see us. Some do as they like face-to-face contact, but it isn't necessary."

One danger with a phone-based dealing service is that you won't be able to get through on the phone. This was an issue during the summer when many investors were trying to sell building society windfall shares - some were held in queues for half an hour or more. Hopefully such problems have been solved. ShareLink was criticised this year by customers who could not get through, but it has installed a new call centre with much greater capacity.

Alternatively, you could deal over the Internet. Three brokers now offer on-line dealing, though to get access to ShareLink, City Deal and Stocktrade you will also have to sign on for the services offered by either ESI or Infotrade. The ESI package is entirely Internet-based, whereas with Infotrade you install software on your computer and then log on to its website to trade. Dealing on-line is similar to trading by phone. Once an account is opened with a broker, you can deal whenever you like by keying in your trades. Your broker will then send you a contract note in the post. Infotrade can update information on your portfolio as share prices change, while ESI has a database of news stories on leading stocks.

Because Internet-based brokers do not have to pay operators, dealing on-line is often cheaper than a phone service. Infotrade charges pounds 14.70 per month for its services, which include Internet access. ESI's basic service is free; more comprehensive facilities cost pounds 5 per month and the deluxe service pounds 20 per month. To get the best deal, shop around between the brokers on the Infotrade and ESI sites.

q Contacts: City Deal, 01708 742288; NatWest Stockbrokers, 0171 895 5955; ShareLink, 0121 200 2242; Sharemarket, 0161 237 9443; Stocktrade, 0131 529 0101; ESI, www.esi.co.uk; Infotrade, www.infotrade.co.uk

Start your day with The Independent, sign up for daily news emails
News
i100
News
Bobbi Kristina Brown, daughter of the late singer Whitney Houston, poses at the premiere of
people
News
people
News
The frequency with which we lie and our ability to get away with it both increase to young adulthood then decline with age, possibly because of changes that occur in the brain
scienceRoger Dobson knows the true story, from Pinocchio to Pollard
Voices
The male menopause: those affected can suffer hot flushes, night sweats, joint pain, low libido, depression and an increase in body fat, among other symptoms
voicesSo the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Life and Style
health
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: DBA Developer - SQL Server

£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen