Revealed: The No-Cost Way To Buy Shares

Those of us old enough to remember the bad old days of full service brokers -- and their eye-watering fees -- appreciate only too well the joys of today's 'execution-only' brokers.

In short, if all you want to do is buy or sell shares (as opposed to receiving advice), then these low-cost brokers are hard to beat.

For a flat fee of typically around £10, the deal is done. It's goodbye to the previous hefty £25 or so fee you'd pay a full service broker for the same transaction, plus -- believe it or not -- sometimes a percentage-based commission as well.

And for those in the know, and who are prepared to buy shares on a regular monthly basis, a number of brokers -- including the Motley Fool's Share Dealing service -- offer an even better option.

For a fixed fee of £1.50 or so -- yes, you read that right -- you can buy shares on a number of set 'dealing days'.

Drip-fed diversification

I'm a big fan of such an approach. It's ideal for regular savers wanting to gain low-cost access to the stock market, and it's a great way for new investors to get started with investing, without paying an arm and a leg in fees.

It also makes it simple to achieve diversification at a low cost. Your £1.50 fee can buy you any number of ETFs or investment trusts, each coming pre-bundled as a basket of shares in different companies. Again, that's great news for those new to investing.

Here at The Fool we're keen to draw investors' attention to the merits of both ETFs and investment trusts, so a commission of just £1.50 has 'bargain' written all over it.

It gets better

But there's an even cheaper way of buying a stake in some (though only some) of Britain's best and most popular investment trusts.

How about a commission of nothing? That's right. Zero, zilch, nada.

A number of investment trusts offer zero-commission purchases of their trusts via monthly savings plans. Yet it's fair to say that these aren't all that well-publicised.

Indeed, I struggled at first to find out which trusts offered such schemes. While monthly savings schemes with a commission of £5 or even £1.50 aren't difficult to find, the only comprehensive list I found of precisely which trust charges what commission was at the Association of Investment Companies (AIC).

The AIC tells me that it eventually plans to provide a direct link to this information on monthly savings plans. In the meantime, you'll have to scroll down to page 48 of this document to get the lowdown.

Top picks

It's not the most exciting material you'll ever read, so to save you the bother I've gone through the list and picked out the 'best buys' for you.

The table below details what I've found. I haven't listed every trust offering zero-commission saving plans, as some of the trusts are either very obscure, very small, or both.

I've also screened for affordability. Fund manager Artemis, for instance, and the well-known Personal Assets Trust (LSE: PNL) both offer zero-commission savings plans. However the minimum monthly subscription is an eye-watering £500. Fine for some, I'm sure, but not best suited to the beginning investor.

Finally, a 'worthy mention' goes to a number of fund managers such as Baring Asset Management and F&C Asset Management who charge just 0.2% -- a sum that still works out cheaper than other brokers' £1.50 charge, even for very modest monthly savings. But free they're not, so they didn't make the cut.

The cheapest savings plans revealed

Here, at last, is the table. Sadly, there isn't space to list the various individuals trust on offer by each manager: some offer just a few, others rather more. And some are definitely worth a second look -- Baillie Gifford, for instance, offers half a dozen or so well regarded trusts, including its flagship Scottish Mortgage Trust (LSE: SMT).