In general, execution-only stockbrokers will offer to traders a great range of options for investment. Through such stockbrokers, a trader may be able to open a normal share dealing account. With such an account, you can choose whether to trade online, over the phone or in person. In addition, execution-only stockbrokers may give you the option to invest in shares within a SIPP or an ISA, in order to access certain tax benefits. Trading securities generally deemed as being ‘riskier’ is also an option offered by some ex-only stockbrokers. In such cases, you may be able to trade CFDs, engage in spread betting, or invest in OEICs, unit trusts or other pooled investments.
Execution-only stockbrokers will hold your stocks for you in accounts known as nominee accounts. This means that the shares are held in the stockbroker’s name, but are ultimately owned by you. In this way, the stockbroker is able to deal with all the administrative business related to the buying and selling of your shares. Execution-only stockbrokers will provide you with access to a trading platform through which you can place trades. They will also give you information regarding relevant financial news and reports.
As opposed to those stockbrokers who operate an advisory service, execution-only stockbrokers will simply facilitate the transactions you choose to make. They will not advise you on what shares to buy or sell, as they are not regulated to do so by the FCA. Some people prefer to use execution-only stockbrokers for this reason, as they like to rely on their own judgement. However, there are other traders who would choose an advisory service instead, for that added reassurance of being able to access qualified opinions. At the end of the day, the choice must be made by the trader himself as to what will best suit his needs.
Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.