Money, Money, Money! (halifax.co.uk)

Member Name: ian22

Product:	halifax.co.uk
Date:	28/08/06 (1346 review reads)
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The stock market has interested me for many years, but until recently, I was reluctant to get involved in share dealing for real, partly because of the costs involved but also because of the risks. However, a few months ago, I discovered Sharebuilder. Launched in 2003, Sharebuilder is a unique share dealing account, which is operated by Halifax PLC. As far as I know, it is the only one of its kind in the UK.

Sharebuilder is great not only for newbies, like myself, but also for more experienced dealers who want to buy and sell shares on the UK stock market. It is important to note that you can only deal in the UK market, not the US or other world markets, but there are literally hundreds of shares to choose from!

REGISTRATION

Registering for the service is done through the Halifax website and is very straightforward, but can take a few weeks to complete because of the various anti-fraud/ID verification checks involved. Before you apply, you need your sort code and account number of your bank account, your National Insurance Number and your address details for the last three years. After a few days, you will be sent some forms to sign and return, and once these have been received, you will get confirmation of your new account and a Personal Registration Number (PRN).

HOW IT WORKS

Sharebuilder is a very flexible sharedealing service because it allows you to choose how you want to deal. For example, some people like to invest in a variety of companies to spread the risks of the stock market, whereas others prefer to take the risk and invest in one or two companies only. However, the great thing about Sharebuilder is that you also get to choose how much you want to invest. You can make small, regular investments or one-off lump sums and hold shares in lots of different companies like your favourite brands. The only condition is that you pay in a minimum of £20 a month (by direct debit) to fund the account. Additional one-off payments can also be made, but these are not mandatory by any means.

BUYING SHARES

When you register, you will be asked to select which day of the month you want to invest on. If I remember rightly, there are four days to choose from, spread across the month. On this date shares are purchased in the relevant companies/brands that you have chosen and all it costs in commission is a mere £1.50! The minimum price you can place on any company is £5 and this works out at £3.48 in shares, once stamp duty and commission are deducted. Obviously, the more money you invest, the more stamp duty you pay, but rest assured that the commission remains fixed at £1.50.

Buying shares can be done in real-time as well as on a fixed date. This means that if you want to take advantage of a particular share price, you can purchase them during trading hours. Once you select the 'buy' option, you are given 15 seconds in which to buy the shares. If this time elapses, the deal is suspended, but if you want, you can wait a few minutes and try again at perhaps a more favourable share price. There are no guarantees, though, of a better quote and it is important to bear in mind that you only have a certain number of attempts to buy/sell in a day!

As long as you keep your shares, you will paid a dividend - normally once or twice a year. Dividends are payments which are made by a company to its shareholders. These can either be paid directly into your Sharebuilder deposit account for you to then withdraw, or be used to purchase further shares within the company. The choice is yours! I haven't had my shares long enough to get any dividends yet, but I look forward to receiving them soon.

SELLING SHARES

You can sell shares at any time during trading hours and the funds will be transferred directly to your holding account. Selling shares works in the same way as buying. The website gives you the latest market price for a share and you are given 15 seconds in which to agree or cancel the deal. Of course, there are charges for selling as there are for buying. As a guide, I have summarised the main charges below:

Deals under £250 = £5 (real-time online sales), £15 (telephone purchases and sales)
Deals over £250 = £11.95 (real-time online sales), £15 (telephone purchases and sales)
Deals between £2500 and £5000 = £11.95 (real-time online sales), £30 (telephone purchases and sales)

In my opinion, these charges are reasonable, but it obviously doesn't make sense to buy and sell on too regular a basis, as the charges will quickly eat into any profit you may have made.

THE WEBSITE

The Sharebuilder website is very impressive. It is detailed and generally easy to navigate, although some of the functions take a bit of getting used to. You will find excellent, up-to-date information on all companies on the UK stock market, including charts and graphs, monitoring shares and comparing them with the shares performance of companies within the same sector. You will not be offered advice on which shares to choose, but are given plenty of information, allowing you to make an informed choice about which shares to invest in. I would strongly recommend you do some research first before investing in any company, because this will give you an invaluable insight into how the company has performed in the past and how it is likely to perform in the future.

Of all the main sections on the website, the 'Statements & Valuation' section is probably the most important and one which I use all the time. It tells you how well - or badly! - your shares are performing and is constantly refreshed throughout trading hours to provide you with an accurate valuation.

MY OWN EXPERIENCE

Since opening Halifax Sharebuilder, I have learnt so much about share dealing and although I haven't been wholly successful in the deals that I have made, I am gaining in knowledge all the time. If anything, my biggest mistake has been to buy shares and sell them too quickly. Although I am not investing huge sums of money, you can still lose quite a bit of money if you're not careful. It is important to understand that shares can go down as well as up, so don't expect to become rich overnight! Shares in companies have historically produced higher returns over the longer term, so this something to bear in mind. However, this is a generalisation and is not applicable in every case.

Overall, I have found the Sharebuilder website very helpful - if a little technical at times. There is a lot of help available for novices and even courses that you can take to improve your knowledge. There is also a section, called Live Assistance, which allows you to contact a member of the Customer Service Team if you have any queries. I haven't used this personally, but it is reassuring knowing that it is there if I get stuck!

If you're interested in shares, I highly recommend Sharebuilder as a way to build up your knowledge of the stock market, and hopefully, boost your bank balance too! Why not give it a go?

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