Share Dealing Discussion Area

PenguinJim

Gene wrote: »

I'm looking to buy actual paper share certificates (I already hold these for different companies - I dislike the idea of paying someone else to look after my shares which I'm not going to sell for years and years) and will probably do so via https://www.sharedealactive.co.uk as their commission looks competitive.

If you're buying, for example, £1,200 of IBM shares, paying the fee of £5.95 to X-O for buying and selling would take away less than £12 from your investment - over many years, it's certainly worth considering compared to storing your own documents.

There are several brokers without annual fees or inactivity charges. If you share (sorry) more details about how often and (extremely roughly) how much you invest, I'm sure we could shortlist the best platforms for your needs.

Nick_C

As far as I can see, IBM is only listed on the NYSE, its not listed in London.

Problems with buying any foreign shares are
(i) you will have to pay withholding tax on dividends. This is normally 30% on US shares, but you can reduce this to 15% by filling out a W-8BEN form.
(ii) you will need to declare any foreign dividends to HMRC, even if you are a basic rate taxpayer, and may be subject to further UK tax on your dividends. Putting your foreign shareholdings into a S&S ISA will protect you from additional UK tax and the requirement to declare the dividends.
(iii) You probably won't get instant dealing, so prices might fluctuate between placing the order and execution.
(iv) You will be exposed to currency fluctuations.

I would recommend using an on line broker rather than holding paper certificates. If you do, then your dividends will be converted into GBP. I don't know how you would receive USD dividends with paper share certificates, but I would be concerned about currency conversion costs. An on-line broker should only charge you for buying and selling, not for holding your shares, although you will pay an annual charge if you use a S&S ISA.

Gene

PenguinJim - Thank you for your advice. I must admit I last looked into buying shares quite some years ago (and already owning some paper shares) was rather put off by nominee accounts due to the annual and inactivity charges they normally had. But it looks as if the market has moved on and is now much more competitive (that's the good thing about markets). I'm probably going to invest about 5000 GBP in total in two firms and keep it there for at least 10 years, and probably not do any other trading in that time. X-O.co.uk does look good, would you recommend any others (although I note it will be a bit sad to no longer get my paper dividends in the post, but I can live with that)?

Nick_C - Appreciate you taking the time to reply. However IBM definitely trade on the London Stock Exchange (http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary.html?fourWayKey=US4592001014USUSDSSX4&lang=en); although you have definitely put me off investing in the NYSE directly, do you think there are any issues with investing in IBM in the London Stock Exchange (e.g. liquidity etc)?

Appreciate your help.

merlin777

I would avoid using Halifax. For one thing they are a bit pricy in terms of fees and they have no fee discount for frequent traders. That doesn't look like a problem for you if you are only buying a couple of times, though.

For another I find their website very flaky. They told me to install chrome instead of using explorer which helped a bit but shouldn't have been necessary. Several times the balanced have been incorrect on the website which prevented me from buying and I had to wait a couple of days before I could buy.

Their online help is a bit of a lottery. Sometimes it's been very unhelpful and I've tried again with a different chat agent and they helped without a problem. For instance, they sent me a W-8BEN form to complete and return to them but there were a couple of things I didn't understand and so didn't know what to put. I asked a help agent and he was very curt and kept telling my they didn't give tax advice. I told him I didn't need tax advice I just wanted to know what the terminology on the form meant but he just wouldn't help. I tried someone else and they helped straight away.

Very frustrated with them. I'm trying to migrate to Interactive Investor who I have found not to suffer form these problems but the Halifax fee of 12.50 per sale means I have to wait until I sell some and then buy from II.

Hope that helps.

Gene

Nick_C: Hmmm, having looked into this a bit more; I think you may have been more right than I am. IBM are listed on the London Stock Exchange (what is called a cross-listing I believe), but I'm not sure one can buy their shares in a simple fashion. I think it is through a negotiated market whereby you need a broker to intervene manually on your behalf and negotiate a price as there isn't a publicly listed one. That's what I suspect is going on anyway, could of course be wrong...

PenguinJim

Gene wrote: »

I'm probably going to invest about 5000 GBP in total in two firms and keep it there for at least 10 years, and probably not do any other trading in that time. X-O.co.uk does look good, would you recommend any others (although I note it will be a bit sad to no longer get my paper dividends in the post, but I can live with that)?

I know what you mean about not getting anything tangible to show for them! I think that is what is fuelling my strange desire to buy some physical gold / silver - something to "show" for my investments. But it's far more logical (and green!) to just have the shares sitting in an online account, I think.

For investing in two firms, with X-O, you'll spend £12 to buy this week and another £12 to sell in ten years, so you can be reasonably sure that £24 will be the total cost. It's nice and straightforward and I doubt you'll beat that price.

However, X-O does not do the Dividend ReInvestment Program (DRIP), so if you have shares paying out dividends, they'll pay into your X-O account and you can either reinvest them manually (at a cost of £6 every time) or transfer them out into your bank account. If you're meaning to reap the dividend income immediately anyway, then that's no problem whatsoever.

But if you're meaning to reinvest and snowball the income, let's say that your £5000 pays out 4% in dividends every year: £200. If you manually reinvest that £200 yourself, once a year, that's 3% lost on fees. Unless the dividends themselves only pay out once a year (unlikely), you'll also have lost the benefit of the extra shares in one or more payouts that year. You could reinvest twice a year - at a cost of 6% - or if you have quarterly dividend shares, reinvest four times a year - at a cost of 12%. It's still not massive amounts, but it can seriously add up over ten years.

X-O is a barebones trading platform, and another popular barebones trading platform is IWEB. With IWEB, you'll pay £25 just to open the account, but then every trade is £5, and again, there are no annual charges or inactivity fees. So for investing in two firms, buy now and sell in ten years, the total cost will be £45. However, if you do start buying and selling shares, you'll be saving £2 for each complete buy/sell trade, so IWEB overtakes X-O on price around the 26th transaction. IWEB also offers DRIP, so you can have those dividends automatically reinvested upon issue.

I use IWEB myself (although for slightly different, complicated reasons), and they're certainly snappy - I can move funds from my bank account into my IWEB account, purchase shares, and have them showing in my account, all in under a minute. Comparatively, X-O can take an hour or two to move funds around. Of course, for two transactions ever ten years, that shouldn't affect you too much.

I've just taken a look on IWEB, and IBM aren't available to buy as a UK equity, but are available as an International Equity. This will mean a 1.5% charge for the currency conversion (on IWEB). I cannot see if X-O allows purchases on the New York Stock Exchange or not, sorry - can someone else please help with this?

Nick_C

I don't understand the business of IBM shares being available through the LSE. They are not dual listed - the shares are only registered in the US and if you buy through the LSE you are still paying in USD.

My experience of foreign shares is limited to dual listings - for example, Carnival Cruise Line trades in GBP in London and in USD in New York - or straightforward foreign listings, such as buying an American share on the NYSE.

I would be interested if anyone with expert knowledge can throw further light on the option of buying IBM through the LSE.

Nick_C

merlin777 wrote: »

I would avoid using Halifax. For one thing they are a bit pricy in terms of fees and they have no fee discount for frequent traders. That doesn't look like a problem for you if you are only buying a couple of times, though.

For another I find their website very flaky. They told me to install chrome instead of using explorer which helped a bit but shouldn't have been necessary. Several times the balanced have been incorrect on the website which prevented me from buying and I had to wait a couple of days before I could buy.

Their online help is a bit of a lottery. Sometimes it's been very unhelpful and I've tried again with a different chat agent and they helped without a problem. For instance, they sent me a W-8BEN form to complete and return to them but there were a couple of things I didn't understand and so didn't know what to put. I asked a help agent and he was very curt and kept telling my they didn't give tax advice. I told him I didn't need tax advice I just wanted to know what the terminology on the form meant but he just wouldn't help. I tried someone else and they helped straight away.

Very frustrated with them. I'm trying to migrate to Interactive Investor who I have found not to suffer form these problems but the Halifax fee of 12.50 per sale means I have to wait until I sell some and then buy from II.

Hope that helps.

I use Halifax and have always been happy with them. Yes, there are platforms offering lower fees, but share prices fluctuate so much that the difference between a fee of £12.50 and one of £6 on a £3000 transaction doesn't worry me. The total price you pay can easily change by that amount depending on whether you deal at 11:30 or 11:30, although if you have a high number of transactions I can see that this could become significant.

I've never had a problem with the Halifax web site. I mainly use Chrome, but sometimes use IE.

Halifax offer low commission for regular investors, and have special offers about once a month where you can trade for £3.95 between 12:00 and 14:00.

sabretoothtigger

Monday 24 November

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marvin

Nick_C wrote: »

I use Halifax and have always been happy with them. Yes, there are platforms offering lower fees, but share prices fluctuate so much that the difference between a fee of £12.50 and one of £6 on a £3000 transaction doesn't worry me. The total price you pay can easily change by that amount depending on whether you deal at 11:30 or 11:30, although if you have a high number of transactions I can see that this could become significant.

I've never had a problem with the Halifax web site. I mainly use Chrome, but sometimes use IE.

Halifax offer low commission for regular investors, and have special offers about once a month where you can trade for £3.95 between 12:00 and 14:00.

can only agree my experience of Halifax has only been positive, I have accounts with both them and X-O but find x-o too amateur which is not others experience with their site.

Yes the Halifax fees are too high they need to be lower but with the £3.95 trades once a month.