Is Share Dealing Dead???

Question

I was writing a review on investment options available in the UK for retail investors and it seams to me that share dealing is dead for retail investors as it's quite expensive (stamp duty, tax, commission) and there're many other options like financial spread betting and contracts for difference available now. I ran through http://www.independentinvestor.co.uk (they claim and actually compare lots of spread betting and cfds accounts) and realised that there were so many spread betting and CFDs companies now and competition between them is fierce. When I checked stockbrokers their websites looked a bit old and out of style.

So is it true that share dealing gets overtaken by other cheaper and more efficient investment options?

Answer 1

There are many budget share dealing services that can reduce the costs of share dealing.  The costs of share dealing may seem a lot, but not compared to the potential returns.

For most people the ISA allowance of £7200 is much more than they would want to invest in a year.  This can deal with the tax implications.  You can get ISAs that allow you to deal in shares, or you can buy funds where shares are bought on your behalf.  One of the cheapest fund is the tracker, as it takes little effort for the administrators.  I have often seen it claimed that few investors or fund managers manage to beat the market as a whole, so for the small investor these funds seem a good buy.

I know little about spread betting, but it has a bit of a dodgy reputation.

Answer 2

The stock exchange is the most important and reliable trading platform for shares of capital market for people to buy and sell their shares..

Answer 3

Well it certainly is coming under a bit of pressure, but I have heard people saying that since Big Bang!

Stockbrokers do CFDs (and some even spread betting.)

Further points to consider: We should shortly have exchanged traded CFDs (so that's shares trading CFDs trading shares!)

Also MiFID allows trading to be effected off exchange-should be a lot of changes coming up.

I don't think it is as simple as you suggest. CFDs & SB are no good for investment, just trading. Brokers are good at dealing or they should be.

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