If selling shares, not only will you bear the brunt of any fall in their value, you cough up for stockbroker charges, which must also be paid when buying shares. Therefore, be careful when choosing your broker as some charge substantially more than others.
"Buy shares online if you can as it's the cheapest option," said Peter O'Reilly, managing director of Kildare financial advisers, the Finance Business. "However, you do have to know what you want. If you want advice from a stockbroker you will pay commission at the top rate."
Goodbody Stockbrokers, Davy and National Irish Bank (NIB) offer accounts which allow you to buy and sell shares online. To open a share-dealing account with NIB, you must also open a current account with the bank. You pay 0.75 per cent commission on any shares bought or sold, and there is a minimum commission of €20. Unlike the online accounts offered by Goodbody and Davy, there is no annual fee on the NIB account.
Davy's online account carries an annual fee of €80 while Goodbody charges €26. If you trade up to €25,000 worth of shares through Davy's account, you'll pay 0.75 per cent commission, 0.5 per cent commission on any balance, or a minimum commission of €25. However, if you trade shares more than 20 times a year through the account, the commission charged is 0.5 per cent on the first €25,000, 0.25 per cent on the balance, or a minimum commission of €15.
Don't make the mistake of buying or selling your shares through Davy over the phone. Otherwise, you'll be hit with a minimum commission of €100, or 1.65 per cent commission on the first €15,000 of shares, 1 per on the next €15,000, and 0.5 per cent on the balance. If you're selling €30,000 worth of shares through Davy's, you'll pay as much as three times the amount of commission (€397.50) over the phone than you would if you did so online (€137.50 commission for frequent traders).
If you're trading shares through Goodbody's online account, you pay 1.25 per cent commission for shares worth up to €25,000, 0.5 per cent on the balance, or a minimum commission of €32. The charge if you trade over the phone is usually slightly less.
If you're trading a small amount of shares, avoid stockbrokers with high minimum commissions-- mainly NCB, Bloxham and Dolmen Stockbrokers. NCB has a minimum commission of €100, Bloxham's is €75 on Irish shares, and Dolmen charges at least €55.
Even if you're trading a large amount of shares, the commission charged by these brokers is usually a lot higher than available online. If selling €20,000 worth of Irish shares, for example, Dolmen and NCB charge 1.5 per cent commission, while Bloxham charges 1.65 per cent commission on the first €13,000 worth of shares, and 1 per cent on the remaining €7,000. Campbell O'Connor charges 1.5 per cent commission on the first €8,888 worth of shares, 0.55 per cent on shares between €8,889 and €19,046, and 0.5 per cent on the balance. The minimum commission with Campbell O'Connor is €25.40. If you're a small investor and don't want to deal online, you might consider Fexco. Its commission rate is 1.25 per cent on trades up to €9,000, and 0.35 per cent on any balance. Fexco Stockbrokers' minimum commission is €25.
Another charge to bear in mind when buying shares is stamp duty. You pay 1 per cent stamp duty when you buy Irish shares, and 0.5 per cent stamp duty on British shares. You don't pay stamp duty when selling your shares but you will usually be hit with capital gains tax of 20 per cent on any profit made.
To see which broker offers best value for your money, try comparing how many shares you would get for your money.
Say you bought €10,000 worth of AIB shares last Friday, based on the share price of €14.80 on that day. The most shares you could have bought -- 665 -- was through Davy's online account (as long as you traded more than 20 times a year through the account). At 664, NIB was next in line for the best value, followed by Goodbody's online account and Fexco at 660. Campbell O'Connor, NCB and Dolmen would have offered you 659 shares. At 618 shares, the least value was offered by Bloxham, and the phone service of Davy's.
If you're a frequent trader, you should be able to negotiate a lower commission with your stockbroker. So just as it pays to shop around, it also pays not to be shy.
Qazxswedc
"Buy shares online if you can as it's the cheapest option," said Peter O'Reilly, managing director of Kildare financial advisers, the Finance Business. "However, you do have to know what you want. If you want advice from a stockbroker you will pay commission at the top rate."
Goodbody Stockbrokers, Davy and National Irish Bank (NIB) offer accounts which allow you to buy and sell shares online. To open a share-dealing account with NIB, you must also open a current account with the bank. You pay 0.75 per cent commission on any shares bought or sold, and there is a minimum commission of €20. Unlike the online accounts offered by Goodbody and Davy, there is no annual fee on the NIB account.
Davy's online account carries an annual fee of €80 while Goodbody charges €26. If you trade up to €25,000 worth of shares through Davy's account, you'll pay 0.75 per cent commission, 0.5 per cent commission on any balance, or a minimum commission of €25. However, if you trade shares more than 20 times a year through the account, the commission charged is 0.5 per cent on the first €25,000, 0.25 per cent on the balance, or a minimum commission of €15.
Don't make the mistake of buying or selling your shares through Davy over the phone. Otherwise, you'll be hit with a minimum commission of €100, or 1.65 per cent commission on the first €15,000 of shares, 1 per on the next €15,000, and 0.5 per cent on the balance. If you're selling €30,000 worth of shares through Davy's, you'll pay as much as three times the amount of commission (€397.50) over the phone than you would if you did so online (€137.50 commission for frequent traders).
If you're trading shares through Goodbody's online account, you pay 1.25 per cent commission for shares worth up to €25,000, 0.5 per cent on the balance, or a minimum commission of €32. The charge if you trade over the phone is usually slightly less.
If you're trading a small amount of shares, avoid stockbrokers with high minimum commissions-- mainly NCB, Bloxham and Dolmen Stockbrokers. NCB has a minimum commission of €100, Bloxham's is €75 on Irish shares, and Dolmen charges at least €55.
Even if you're trading a large amount of shares, the commission charged by these brokers is usually a lot higher than available online. If selling €20,000 worth of Irish shares, for example, Dolmen and NCB charge 1.5 per cent commission, while Bloxham charges 1.65 per cent commission on the first €13,000 worth of shares, and 1 per cent on the remaining €7,000. Campbell O'Connor charges 1.5 per cent commission on the first €8,888 worth of shares, 0.55 per cent on shares between €8,889 and €19,046, and 0.5 per cent on the balance. The minimum commission with Campbell O'Connor is €25.40. If you're a small investor and don't want to deal online, you might consider Fexco. Its commission rate is 1.25 per cent on trades up to €9,000, and 0.35 per cent on any balance. Fexco Stockbrokers' minimum commission is €25.
Another charge to bear in mind when buying shares is stamp duty. You pay 1 per cent stamp duty when you buy Irish shares, and 0.5 per cent stamp duty on British shares. You don't pay stamp duty when selling your shares but you will usually be hit with capital gains tax of 20 per cent on any profit made.
To see which broker offers best value for your money, try comparing how many shares you would get for your money.
Say you bought €10,000 worth of AIB shares last Friday, based on the share price of €14.80 on that day. The most shares you could have bought -- 665 -- was through Davy's online account (as long as you traded more than 20 times a year through the account). At 664, NIB was next in line for the best value, followed by Goodbody's online account and Fexco at 660. Campbell O'Connor, NCB and Dolmen would have offered you 659 shares. At 618 shares, the least value was offered by Bloxham, and the phone service of Davy's.
If you're a frequent trader, you should be able to negotiate a lower commission with your stockbroker. So just as it pays to shop around, it also pays not to be shy.
Qazxswedc