What do I need to know to get started?
20/02/2018 4:39 a.m.
If you are new to investing or concerned about how to place an order through
our DIY Service (via our website or Telephone Trading) please feel free to call
0800 805 777 and one of our Dealers will guide you to get you started.
We would recommend you write down all details of orders before you place them.
If you need to phone us for assistance it would be helpful if you could have
your Client Number handy. We will have sent you your client number either via
email or letter when you first joined!
Please note: First BUY orders must be accompanied by pre-payment; this can be by
electronic funds transfer or by sending a cheque.
Once your trade is executed, please expect the following:
If you traded through our Online DIY Service a contract note is sent (via
email) after the trade has been completed, or at the end of the day for
part-traded orders (PDF format)
If you traded through our Telephone Trading DIY Service a contract note is sent
after the trade has been completed, or at the end of the day for part-traded
orders. If you have not supplied an email address, the contract note will be
posted to you.
This communication will include details of the number and dollar amount of the
trade and any applicable fees. We strongly advise you to review the trade
notice and the contract note to ensure it correctly records your trade. Should
you have any queries please call us immediately on 0800 805 777.
Who can open an account?
Recognisable Societies & Charters etc
Minors (under the age of 18), those under the age of 18 must have an agent
What are the risks?
Investing is always subject to one fundamental principle - the higher the risk,
the higher the return (and vice versa). Some forms of investment, like bank
deposits, are widely recognised as low risk but they usually give lower
returns. Generally speaking, shares are higher-risk than deposits, debt
securities and property. But they also offer the prospect of much higher
returns, especially over the longer term.
The risks in share investing are closely linked to all the uncertainties that
exist around businesses and the profitability of companies, now and in the
future. Some companies - especially those with established businesses and
steady profits from year to year - involve far less risk than others (although
returns tend to be lower as well).
The risks can be reduced by taking the view of investing for the long term,
selecting shares carefully and spreading investment across different types of
companies and industry sectors (the process of "diversification").
While history shows that share prices rise over time, there are no
guarantees - especially when it comes to individual companies. Unlike debt
securities, which promise a payout at the end of a specified period plus
interest along the way, returns from shares come from dividends companies pay
out of their profits, and capital appreciation of the shares through a rising
share price. Neither of these can be guaranteed.
The worst-case scenario is that a company goes bankrupt and the value of your
investment evaporates altogether. Happily, that's rare. More often, a company
will run into short-term problems that depress the price of its shares for what
can seem like an agonisingly long period of time.
In investing, risk is the chance you take that the returns on a particular
investment may vary. Because of the increased uncertainty of returns, investors
will, all other things being equal, require a higher return if they take on
For all the risk, however, there are ways to manage your exposure. The best is
to diversify by owning a variety of shares and other investment products, such
as debt securities. That way, no single company can endanger your savings. It's
also important to remember that investors are well compensated for taking the
risk with shares. Historically, the long-term return from shares is much higher
than for debt securities, which are less risky. Over time, that spread can make
a huge difference in the earning power of your savings.
Risk vs return
No matter what you decide to do with your savings and investments, your money
will always face some risk. You could stash your cash under your mattress or in
a piggy bank, but then you'd face the risk of losing it all if your house burnt
down. You could deposit your money in the bank, but the buying power of your
savings would barely keep up with inflation over the years, leaving you with
possibly less dollars in real terms than when you started. Investing in shares,
debt securities, or mutual funds carries risk of varying degrees.
The second fact you need to face is that in order to receive an increased
return from your investment portfolio, you need to accept an increased amount
of risk. Keeping your money in a savings account reduces your risk, but it also
reduces your potential reward.
While risk in your investment portfolio may be unavoidable, it is manageable.
The riddle of controlling risk and return is that you need to maximise the
returns and minimise the risk. When you do this, you ensure that you'll make
enough return on your investment, with an acceptable amount of risk.
So, what constitutes acceptable risk? It's different for every person. A good
rule of thumb followed by many investors is that you shouldn't wake up in the
middle of the night worrying about your portfolio. If your investments are
causing you too much anxiety, it's time to reconsider how you're investing, and
sell those securities that are keeping you awake at night in favour of
investments that are a little less painful. When you find your own comfort
zone, you'll know your personal risk tolerance - the amount of risk you are
willing to tolerate in order to achieve your financial goals.