Shares - - TALKING POINT -

BE­FORE YOU CON­SIDER what to in­vest in, you need to con­sider how you will in­vest. This means open­ing an ac­count with a stock­bro­ker or in­vest­ment plat­form.

Most peo­ple will look to in­vest through an ISA in or­der to keep the bulk of their re­turns out of the tax­man’s grasp. You can in­vest up to £20,000 a year in an ISA and you don’t have to pay any tax on cap­i­tal gains and div­i­dend in­come for in­vest­ments kept in­side this wrap­per.

It’s also worth con­sid­er­ing pay­ing as much as you can into a pen­sion, as­sum­ing you don’t need the money un­til age 55. You can pay the equiv­a­lent of your earn­ings into a pen­sion each year, up to a max­i­mum of £40,000. If you’re a ba­sic or higher rate tax­payer, you’ll get 20% in­come tax re­lief and if you’re an ad­di­tional rate tax­payer you’ll get 25% tax re­lief.

Help­fully, most bro­kers or in­vest­ment plat­forms of­fer ex­e­cu­tion-only share deal­ing ac­counts, SIPPs or ISA wrap­pers. Un­der an ex­e­cu­tion-only re­mit a stock­bro­ker will buy or sell ac­cord­ing to your in­struc­tions with­out pro­vid­ing any form of ad­vice.

How­ever, a lack of ad­vice should not mean a lack of sup­port and it is im­por­tant to pick a bro­ker which is trans­par­ent, user-friendly and ef­fi­cient. Have a read of re­views on the in­ter­net to see what other cus­tomers are say­ing about the level of ser­vice, for ex­am­ple.

After all a stock­bro­ker is there to help you build and main­tain your port­fo­lio. Given this vi­tal role it is re­ally im­por­tant to make the right choice.

If you do not shop around for a good bro­ker you could end up fac­ing pro­hib­i­tive charges when you buy and sell as­sets such as shares, in­vest­ment trusts, funds, ex­change-traded fund (ETFs) or cor­po­rate bonds.

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