Newest Review: ... linked account, and the funds are held as cash until you choose to invest them. You can choose to invest in three ways: buy instantly, whic... more
Member Name: tirial
Advantages: Easy to use, low fees
Disadvantages: Not for active traders
I originally chose Halifax Sharebuilder because of its low charges - £1.50 per purchase was exceptionally good. The Sharebuilder was easy to use and open, and I transfered shares from an existing account without any issues.
In general the sharebuilder is designed for people looking to build up a portfolio over time but not to invest large amounts of money, or trade actively - an approach called Buy and Hold. The low charges and ability to schedule your investments and funding allow users to plan their investments carefully, and then set them up so that each month their account is debited and new shares purchased.
You fund the Sharebuilder account by bank transfer from your linked account, and the funds are held as cash until you choose to invest them. You can choose to invest in three ways: buy instantly, which incurs the larger fee, schedule a one-off purchase using some or all of the money in your holding account, or set up a regular investment at the same time each month and forget about it.
Dividends are paid back into the holding account linked to the Sharebuilder, and you can reinvest them or withdrew them into a bank account.
The Sharebuilder is less suitable for people planning on active dealing as the low cost share purchase price only applies to planned purchases on one of four dates during each the month. Although shares can be bought at other times the charges will be much higher. However, the buying and selling fees are still reasonable, even at the higher level. If you need to sell shares, the rate is fixed - there are no discounted selling prices. This makes it a better account if you plan to hold share long term.
The shares offered focus mainly on the UK and FTSE shares, rather than on the international scene, and I have run into issues when looking to buy bonds. However the sharebuilder does allow fractional shareholdings, so if you buy £20 of an £11 share, you get 1.81 shares. This means that if you reinvest dividends even small holdings can grow.
In general the interface is simple and easy to use. Even unusual things like corporate actions (takeovers etc.) can be handled online through a set of options. Although the online help pages are limited, the livechat help facility works surprisingly well and managed to resolve the majority of my issues without resorting to phone calls. One nice touch is that the Halifax has now grouped all the share account together, so you can also view Share ISAs, Share dealing account etc, through the same interface.
There are a few annoying issues. For some time, the sharebuilder reduced fees were not credited correctly, leaving you to reclaim them and this took several months to correct.
In general I would recommend the Sharebuilder account to anyone looking to build up a small holding in shares without making a large investment each month. It would be ideal for new investors to learn without risking large amounts of money.
(An update on my CIAO review)
Summary: An easy way to build a portfolio