By: Peter Stephens | Updated: 10th September, 2019.
The Share Centre strikes a nice balance between providing a feature-rich platform and still offering competitive trading fees for investors that trade regularly and pay for the ‘frequent dealing option’. It may be especially attractive for investors interested in overseas shares, as there are no extra fees for trading non-UK shares. Due to the fee structure, this account may not be a great fit for investors that trade very infrequently.
At its core, the Share Account from The Share Centre does exactly what it should. Namely, it provides access to buy a wide range of shares, funds, ETFs, gilts, bonds and investment trusts. And with a clear, easy-to-use interface, it’s easy to get started quickly.
For those who want to do some research and build their own portfolio, The Share Centre offers a wide range of research from its own in-house team of analysts that can help you get started. The site also provides news and information about a variety of shares and the market as a whole.
For those interested in international shares, The Share Centre’s offerings could be especially attractive, as there aren’t extra fees for dealing in international shares.
Getting started is quick and easy, as an account can be opened in a matter of minutes online. Both payments into the account and withdrawals — should you need to pull some money out later — are free.
You can also stay up to speed on the go with The Share Centre’s mobile app. Through the app you can check on the status of your account, as well as the performance of your holdings.
And if you’re looking to get invested and diversified without doing a lot of work on your own, a collection of low-cost ETFs (which you can find on The Share Centre) can be a really great option. The Share Centre also offers three multi-manager funds of their own which have differing risk/reward profiles: ‘Cautious’, ‘Balanced’ or ‘Adventurous’. They are available for investments of as little as £25 per investor. These could be a good option for certain investors, but do make sure to examine the fees on these funds before investing.
I have been writing for The Motley Fool since 2013, and have experienced the booms and busts of the UK economy for a number of decades both as an investor and a consumer. I have held various senior management positions during my career, while also setting up my own manufacturing company in 1996. It was subsequently sold in 2007. I have a keen interest in consumer finance, as well as in the stock market.
With a Share Account at The Share Centre, you have two options for commissions:
This could be a good match for certain investors. For instance, if you want to get started with a small amount of money and expect to be consistently trading less than £750 at a go, then paying £7.50 per trade isn’t bad at all, especially when you consider that the monthly platform charge for the standard account is low (£2).
But do consider the total percentage of your investment that commissions will eat up. If, for example, you buy £500 worth of shares, you have to assume you’ll end up paying at least £15 in dealing fees (£7.50 to buy and at least £7.50 to sell, assuming the sale value is still below £750). In this case, commissions account for 3% of your initial investment, so you’ll need a 3% gain in your shares to break even on the dealing fees. That’s not that bad. However, if you invest just £150, then you’ll need a 10% gain just to break even.
Sticking with the standard dealing option, if you expect that your trade values will vary in the £600-to-£1,000 range, in my view this standard option could still be ok. A £1,000 investment would mean a £10 dealing fee, which is still fairly competitive. But if you expect to be consistently investing larger sums or very frequently, this standard dealing option probably won’t be a great fit.
The second account type is a Frequent Dealing option. It charges a flat rate of £7.50 no matter what transaction size. In exchange for the lower dealing fee you pay a £24 quarterly fee.
By examining how you normally invest — that is, how often you trade and how much you typically invest — you can fairly easily figure which account is a better fit. As mentioned above, if you’re investing smaller sums, the standard option will probably be better. This is true even if you’re trading relatively frequently. Making 10 trades of £800 each month, for example, is still better done with the standard commissions. However, if you’re trading regularly — let’s say more than two-to-three times per month — and with larger sums — more than £1,000 per trade — then the Frequent Dealing option may be the better choice.
And what if you’re investing larger sums (for example, more than £2,000 per trade), but trading very infrequently (let’s say once every other month)? In that case, The Share Centre Share Account may not be a great fit. For the larger-sum, infrequent investor, the standard dealing option gets expensive, as 1% of a £2,000 trade is a £20 fee. At the same time, £96 is a hefty amount to pay annually for access to £7.50 trades for just a few trades per year.
As mentioned above, in addition to commission costs, The Share Centre’s Share Account also charges a £2 monthly admin fee.
In addition to its commission costs and admin fee (as well as frequent trader fee for applicable customers), there is also a dividend reinvestment fee of 0.5%.
Regular investing costs 0.5% per trade. This is relatively high when compared to other share-dealing providers. It’s possible to find flat rates that are as low as £1.50 per trade. Therefore, in my opinion there may be better opportunities elsewhere if you want to cut commission costs to the bare minimum through regular investing.
Investors who wish to trade via phone, post or email will pay £20 if the transaction is under £2,000, and will pay 1% of the transaction for amounts above £2,000.
There is also a fee of £25 per line of stock for transferring shares to another provider.
The Share Centre offers a wide range of choice for investors who are looking to manage their own portfolio. This includes international stocks, for which there is no additional dealing charge. This could make it relatively good value for money compared to other providers, with many of them charging a foreign exchange fee of 1% to 1.5%.
In fact, in my view, this is one of the most attractive features of The Share Centre’s offer. As someone who holds international stocks, the option to avoid additional dealing charges is highly welcome.
And this goes beyond just a ‘nice to have’. Many investors do not end up being as diversified as they should be. And when it comes to geographic diversification, extra fees are often a barrier. The no-extra-fees for international stocks at The Share Centre could encourage exposure to a wider variety of countries within a portfolio and lead to lower overall risks.
Buying local shares, funds and ETFs, meanwhile, is a straightforward process, which may become even easier for some investors thanks to the research and news available on the platform.
The Share Centre’s platform is relatively intuitive and easy to navigate. It provides a range of information that is easy to find, but does not overload an investor who wishes to keep things simple when managing their portfolio.
In terms of overall functionality, The Share Centre’s platform is laid out neatly, and within a few minutes of using it I found myself easily navigating through the various menus. The fact that the platform is integrated within the wider website means that finding news and information is relatively straightforward.
The company’s mobile app helps to differentiate it from other providers. It keeps investors up-to-speed with market news and research, as well as providing the latest valuations on holdings within their portfolio. If you wish to stay updated on your portfolio’s performance while on-the-move, the company’s mobile app could be a key differentiator versus other platforms which may not offer one.
Perhaps one criticism of The Share Centre’s platform is its appearance. Although it is highly functional and quicker than some of its rivals to load various screens, to me it looks a little outdated. It reminds me of older online sharedealing platforms that, while very easy-to-use, are not as visually appealing as some of the more modern platforms that are now available. Appearance is, of course, subjective and this quibble may not matter to many investors.
The Share Centre offers an impressive amount of research on a variety of companies. Its research notes are concise and provide key information in a format that most investors of varying experience are likely to find easy to digest.
It also has a vast amount of data on a wide range of companies. For example, its research contains financial information that includes forecasts, balance sheets, income statements and cash flow statements. It therefore caters to investors with varied levels of experience.
It took just a few clicks for me to jump through the site and read a research note, buy/hold/sell recommendation and financial information for a couple of shares (for no particular reason, I looked at Boohoo and Aviva). The data as a whole provided a really good, big-picture perspective on both of these companies that would help me determine whether I wanted to dig in further and do heavier research.
What stood out to me as particularly good were the bulleted lists of “Key reasons to buy” and “Things to be wary of” in The Share Centre’s analyst’s review. The financials (overall) were nicely laid out and easy to quickly scan. And I really liked that the directors’ dealings and holdings were quick to find.
I thought it was a little strange to find financial ratios buried at the end of the section on cash flows (I figure ratios should probably have its own tab), but once you know it’s there, it’s easy enough to find. And it would be nice if there were industry-specific financials and ratios, like insurance indicators for a company like Aviva. But that may be asking for a lot.
And since The Share Centre provides clear buy/sell/hold views, plus easily-accessible compilations of other brokers’ views, investors who are looking for inspiration on what to buy or sell may find The Share Centre’s recommendations and latest tips of use.
There is also a wide range of market news and data that could help investors to manage their portfolios more effectively. The content of the site can be fairly light-hearted, which makes for an interesting read even when you are not actively looking to buy or sell shares.
You can open an account in a matter of minutes, with information such as your bank account details/debit card details, address history and financial details being required.
There is an extensive help section on the website. Alternatively, you can call The Share Centre between 8am and 6pm on working days, or write to them.
Over and above anything else, The Share Centre’s Share Account makes investing easy. The site is straightforward and easy to navigate, and while choosing the right dealing-fee option takes some consideration, the fees are clear and transparent.
The Share Centre also offers a variety of features that could help make buying and shares easier. For example, it has an extensive range of research notes that cover a variety of companies. It also offers a mobile app, as well as access to the latest economic and stock market news.
Therefore, investors who are looking for more than just a share-dealing provider who executes their trades may find it appealing.
The option to have a frequent trader account may make it attractive to investors who wish to buy and sell shares on a regular basis. It could also be a good place for a new investor with less funds to invest, since they’ll pay just £7.50 per trade (for trades less than £750) even with the standard dealing option.
However, the fee structure does make it a decidedly less appealing option for investors who wish to make infrequent large trades. For these investors, the choice between paying 1% of transactions over £750 or £96 per year for the Frequent Dealing option isn’t ideal. Fans of regular investing may also find that fees elsewhere are more attractive.
And, of course, if you’re looking for a simple, straightforward, functional platform, The Share Centre may be right for you. But if you want something more cutting edge, The Share Centre’s platform may appear a little outdated compared to some of its peers.
As always, in the end, the answer to ‘is it right for you?’ is, of course … ‘it depends’. That comes down to what you are looking for from a share-dealing provider in terms of additional features, as well as how frequently, and how much, you intend to trade.
Peter Stephens owns shares of Aviva, but does not have a financial interest in any of the other companies mentioned in this article. The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. The Motley Fool has recommended shares in Lloyds, Tesco and Barclays.