Lloyds TSB Share dealing- any good?

trikidy

Looking at investing in shares, absolute beginner I am.
On my online banking Lloyds have share dealing, it seems fairly straight forward, so thought I would ask on this board for some feedback/advice before I go any further!
So please enlighten me!
Thank you!

guitarman001

I think their admin fees for just holding an account can really add up. There are cheaper alternatives!

trikidy

guitarman001 wrote: »

I think their admin fees for just holding an account can really add up. There are cheaper alternatives!

As I said, I'm an absolute beginner. I watched their video demo and it said free to open. How do I find fees?
What is a better alternative?
Thank you

trikidy

Wow, £15 charge for every transaction, so to buy a share £15, and then selling also £15.
Are all places like that? Seems alot!
http://www.reviewcentre.com/reviews193298.html

guitarman001

http://sharedata.lloydstsbsharedealing.com/focus/ourservices/prices/index.html

trikidy

guitarman001 wrote: »

http://sharedata.lloydstsbsharedealing.com/focus/ourservices/prices/index.html

Yeah, lots of charges!

Ifts

trikidy wrote: »

Looking at investing in shares, absolute beginner I am

Don't rush into things. Read up and learn as much as you can before you part with any money.

See if you can get your hands on any of these books:

The Naked Trader (by Robbie Burns)

Smarter Investor (by Tim Hale)

The Intelligent Investor (by Benjamin Graham)

TheBookDepository.co.uk - Good prices + Free delivery

When you think you are ready to have a go at trading you can try out your strategy by having a practice first without committing real money, try it for a while and see if its something that you think you could be good at.

Here is the link for the Share Centre*: Practice trading shares with FREE practice account, you will have to register but its free.
Once you have registered you will have access to advice to help you get started and research tools so you can learn more about the market.

Bear in mind that a practice account does just that, it gives you an idea how things operate, but its very different in reality when you're staking real money, emotions etc.

Always do your own homework/research. Only invest money that you can afford to lose, should the worse happen.

trikidy wrote: »

What is a better alternative?

Share Dealing sites I use are: http://www.x-o.co.uk/ (£5.95 a trade)

also: https://www.share.com/a/index.html

A new telephone only sharedealing service from Jarvis Investment Management Ltd called Ring395 @ £3.95 fixed commission:
http://www.ring395.co.uk/ (I have not used this new service myself)

The Motley Fool site is a good place for information regarding shares: http://www.fool.co.uk/

Monevator is also a good place for info: http://monevator.com/

Good luck

*I'm sure there are other companies that offer practice accounts too.

bowlhead99

Ifts wrote: »

Don't rush into things. Read up and learn as much as you can before you part with any money.

This is sound advice, and there's plenty of decent information in the rest of that post.

But I wouldn't necessarily go along with the advice to read the Naked Trader, and set up a 'play' account to practice. Trikidy is looking to invest in shares, but I assume not looking to give up the day job and make a living buying and selling shares several times a week. While it might be quite fun to hear about why Robbie Burns thought a particular share was good at 1.80 and how he could sell it a month later for 2.20 - most on here will tell you that if you don't have a lot of experience of the markets, buying shares in a company is an investment to be considered over the medium term, and other than perhaps setting a 'stop loss' price, you should be able to ignore daily price movements.

Therefore, while it can be fun to see how a theoretical basket of shares performed over the last week, month or three, and it can be quite educational to see how much even the 'safer, big company' shares can move up and down on a very short timescale, it's not a particularly useful guide to how they will perform over the 6 months after you actually buy them for real.

Markets are quite volatile at the moment and may still be after a year. If your preferred share goes up 10% in two months while in your pretend account, perhaps this validates your investment choice, although you actually just missed out on 10% growth and maybe a dividend and it's now a less attractive proposition. If it went down 10%, well you saved some losses; are you going to wait until every share you like hits rock bottom, and how will you know when they get there?

I would try to get some education first (the Ben Graham book was written 60 years ago but still has sound advice), research the companies you're considering (read all their news announcements, financial results and press) and then take a punt for a small investment on your two or three favourite companies using a low cost broker, without investing thousands in those companies. Watch them, follow their news and after a year or so, you can look back, re-research the companies and try and understand how the prices moved like they did. But you will at least have been invested for a year and it's not just a fantasy share portfolio, so you actually care.

For most people, the eggs in one basket approach of picking individual companies is only done once you already have cash savings, and investments in less risky holdings of investment funds and bonds. By all means, try some shares, but if you want to invest say £3000 this year and you have never bought individual shares before, you could buy 2 companies x £500, and 2 funds x £1000.

The shares could of course be 2x £250, but as you saw, the dealing costs can really add up for small trades. If you buy £250 of shares and pay £1.25 stamp duty and £10 broker fee, that's 261.25. Then sell the same day for £248 (there's always a spread between buy and sell prices), and pay £10 to sell - you get £238. On your 261.25, you've lost 9% even with the share price standing still. Of course the share price might go up by 50% in a year which is perfectly possible with some companies, but those are the ones where it might also go down by 50% or more.

Good luck!

bowlhead99

As a P.S. (if you were able to bear with me through the long post above!) - I bank with Lloyds and have done so for years, never tempted by their shares service. High street banks are known for, and good at, stuff like current accounts, savings accounts, loans and sometimes credit cards. They also sell services on the side like insurance, pensions, stockbroking etc. But if you actually want these other financial services, you'll generally find a dedicated company is better.

Either they offer more features for the same or lower cash, or they offer the same features for quite a bit less cash. In shares/funds investing, someone like TD Direct Investing is better than LloydsTSB for the first reason, someone like X-O is better for the second.

Without wanting to say Lloyds have a bad product (I haven't tried it), one assumes they can do a lower quality product for more money because customers will pay for a convenience factor of dealing with a name they know, even if it's a completely separate department with different customer service levels, rather than leaping into the unknown with another company.

geoffken

Try Halifax share dealing.
Can buy shares on monthly basis at £2.00 a time.or lump sum when you want

bowlhead99

A lot of the big name brokers have a 'regular investment' product like the Halifax one, and many are cheaper (e.g. Selftrade and TD are both 1.50). If you were investing £200+ a month this can be a good way to go, because the dealing charges are only about 1%, and lower than the £10-12 you'd pay for a one off deal, and also if you commit to investing monthly there will never be an inactivity fee.

The downsides are:
1) Investment choice is normally limited, because it's only in the really big shares that they know they'll be able to combine enough small orders from a bunch of customers each month to make the low dealing cost work. For example, Selftrade is all FTSE100, some ex-FTSE 100, plus some funds and ETFs. TD's offering includes FTSE 350 as well as funds and ETFs. Halifax's website doesn't say what the limitations are, but it's unlikely to include AIM shares, foreign shares etc and you might find after opening the account they won't let you buy the shares you really want.

2) The low monthly minimums sound attractive but make it very expensive if you were suckered into the advertised £20-25 a month as a toe-in-the-water instead of £200+. If you''re restricted to large stocks and looking at a long term return of 5-10-15% a year, you would be crazy to pay £2 in dealing charges every time you put £20 in. That's a 10% loss immediately, and remember it will still cost you £10+ as a one off fee to sell after a year or so, which could be 5% of what you built up.

A dealing cost of 10% might be more acceptable on a risky AIM oil explorer or tech company which, after 5 years, might either be 2x-10x its starting price or 1/4 of its starting price. If it's a binary bet like that, you'll either be a big winner or a big loser and the dealing cost becomes less important. But all the major brokers which do these cheap regular investment programmes won't let you play far outside the large FTSE100 /250/ 350 companies.

Of course if you're at the other end of the scale and have 500-1000 a month to spare it doesn't really matter whether you pay £2 a month with Halifax or shop around for £1.50 a month, as the cost is then only a tenth of a percent and gets lost in the rounding.