What does a stockbroker do?
He or she buys shares on your behalf and charges you a commission for doing so.
It may cost you as little as a tenner if you use a cheap online share trader, or several thousand pounds if you pay someone to look after your million pound share portfolio.
The choices:
Discretionary stockbroker
A discretionary stockbroker trades on your behalf to a prearranged strategy. You will generally pay around 1pc of the value of your share portfolio for the service.
Execution-only stockbroker
Sometimes known as bucket shops, they are stockbrokers that offer a no-advice, no-frills service.
Economies of scale mean they can charge as little as £7.50 per trade, though generally £10-£12.50 is par for the course.
Traditional stockbroker
The traditional stockbroker is a dying breed. But they are still around.
They will offer advice on building a diversified portfolio, creating an investment strategy and are also useful if you want to get your hands on lightly traded shares that are hard to come by.
Some help with your decision
Nowadays people are using execution-only brokers. They are cheap and with the advent of broadband offer a slick online service.
Use our link through for a list of stockbrokers and use our short review of their services.
Click here and we'll tell you what you need to sign with a broker. Use our simple guide to buying and selling shares over the internet.
If you don't want to use our list of recommended stockbrokers then, check the stockbroker you have chosen is legit, check the charges, both the above-the-line advertised variety and the other management charges that may also come with the account.
In his book The Naked Trader Robbie Burns, suggests not to pay more than £12.50 per trade. We would go along with that.
He also suggests that you take out accounts with two competing brokers and compare their services directly.