UK Share Dealing Guide

One of the many ways that people invest is direct equity investment - individual ownership of stocks and shares.

While popular schemes such as unit trusts invest your money in a basket of stocks and shares chosen by a fund manager, direct equity investment gives you a say in what goes into the basket. You have a direct contact with your fund manager, working together to create the right portfolio for you, or you give your own instructions on how to manage your investments.

More than 12 million people in the UK directly hold stocks and shares. Many of us snapped up shares when former public utilities such as BT and British Gas were privatised in the 1980s.

More have joined in the 1990s through building societies which have converted to banks, offering share "windfalls" to their former members.

You can get two kinds of return on your investment in shares - capital growth as the value of your shares rise - and income as the shares pay dividends to investors. Both of these should rise to reflect a company's continuing prosperity.

In bank or building society savings accounts, your money simply earns interest over the years at whatever the current rate happens to be - the original capital sum you have invested remains the same, although its purchasing power actually declines over the years because of inflation.

But shares are risk investments - their prices can go down as well as up. Over the long term the trend is upwards - even the dramatic rises and falls of the late 1980s did nothing to undermine the continuing upward trend in the performance of ordinary shares.

Factors to consider when selecting a stockbroker:

	Dealing charges - flat, layered or percentages, are there higher rates for telephone trades?
	Account fees - are there annual account fees or inactivity charges?
	Transfer fees - how are these set?
	Investment choice - make sure you choose a broker that offers access to the range of investment instruments that interest you.
	Order types - does the broker offer limit and stop orders as well as 'at best'?
	Nominee accounts - you'll have no more hassle with share certificates and dividend cheques, but you'll not benefit from more shareholder perks.
	Account funding - is there flexibility? Can you fund via debit card, direct debit, cheque?
	Technology - does the broker have expertise in online broking?

We recommend that stock market investors and traders get hold of the comprehensive, up-to-date guide "How to Avoid Tax on Your Stock Market Profits". It includes a huge amount of unique tax planning advice for anyone who owns shares, unit trusts, ISAs, corporate bonds or other financial assets.

Here is a listing of featured firms that provide share dealing services: