At Stockopedia we recently expanded our coverage to include US markets. As part of our guide to Getting Started in US Shares, we investigated some of the international brokerage options that are on offer to UK investors. What we found was a range of services and fee structures that varies wildly. So before diving in to US markets, it pays to check that your broker actually provides a service that suits your needs.

Does your broker offer online dealing?

Remember, a huge part of successful investing is keeping the costs low. Some people love the sound of an opinionated, portly fellow at the other end of a phone line before they buy their shares, but in these austere times we really ought to do away with such luxuries.

The advent of online execution-only (XO) dealing has made the cost of trading shares super-cheap - and all at the click of a mouse. But beware, many stockbrokers do not provide online share dealing for US and international stock markets. They will suck you in with cheap UK share dealing and fleece you as your itchy feet take over.

Insist on low cost online dealing in all the markets covered by your broker. Our research suggests this excludes a lot of the full service old-school British brokers like Killik & Co, Charles Stanley, Daniel Stewart, Redmayne Bentley etc, in favour of larger or international players like Saxo Bank, TD Waterhouse, Hargreaves Lansdown, iDealing and Barclays.

Does your broker charge low commission?

Standard online commissions on US share trades are usually in line with those offered for UK shares but they do vary widely between brokers depending on the frequency of your trading.

Commission for XO dealing starts from around £9.95 (AJ Bell) up to £17.50 (TD Direct Investing), with discounts available for frequent trading. Don't be reeled in by cheap frequent-trader rates though - they may start at £4.95 per deal but it's unlikely you'll trade enough to qualify for them.

Does your broker charge low forex rates?

It may seem obvious, but you can’t buy a US stock unless you have some US dollars! On most occasions, brokers will convert your hard earned pounds into dollars behind the scenes and charge you a variable rate of commission. In the case of Crest Depository Interests (CDIs) or shares bought via market makers, forex fees can even be bundled together with commission charges and hidden…

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