A broker is unavoidable if you want to buy and sell shares, but it doesn’t have to be a City gent in a pinstripe suit. These days a stockbroker is more likely to be an internet site. And that’s no bad thing.

The internet is an ideal way to trade shares. You can buy and sell at real-time prices and monitor the value of your holdings. You can also do quite a bit of research online.

The internet has driven down trading prices, too. You normally have to pay a quarterly management fee, plus a charge every time you trade.

But many online firms waive the management fee these days. They also often let you trade in a number of the bigger foreign stocks at no extra charge.

Don’t forget the other costs involved. You pay stamp duty of 0.5 per cent when you buy UK listed shares. There is also a £1 levy to the Panel for Takeovers and Mergers on transactions of more than £10,000.

So here are my top three online stockbrokers. They don’t tell you what to buy or sell, so the firms have been judged on price — and also on the little extras that can make all the difference.

They impose few — if any — trading restrictions, and they all allow you to set “stop losses” that limit your potential losses or lock in any gains, for no extra charge.

Watch out for switching fees. If you want to move your account to a rival firm, your broker could charge as much as £15 a stock to switch.

---

1 Hoodless Brennan

I’ve chosen Hoodless Brennan because it pops up as one of the cheapest stockbrokers, whether you trade every day in large amounts or once a year in small amounts — as long as they are no smaller than £50.

The firm doesn’t charge a management fee and the commission is a mere £7 a trade, although it’s free for the first month. You can even deal in about 300 European and American shares for the same flat fee. So, it’s a winner on price.

There’s some research available on the website, particularly into smaller companies. But if you are buying shares to put into a self-select Isa, you have to pay an annual management charge of £50.

The big downside of the site is that you cannot buy funds. But Hoodless Brennan is a good, no-nonsense broker for the cost- conscious investor. The site is at hoodlessbrennan.com.

---

2 The Share Centre

It’s common for online stockbrokers to offer accounts to suit different types of trader, and The Share Centre is no exception.

I’ve picked its Trader option as the account with potentially the widest appeal. You pay a quarterly management fee of £20 plus Vat, which allows you to buy and sell shares up to the value of £25,000 for a flat-rate commission of £7.50 a trade. Deals over this size are charged at an additional £7.50 per £25,000.

The charges are different for Isas: you pay a quarterly management charge of up to 0.125 per cent of the value of your investments. If you had £20,000 in your Isa account, for example, your quarterly fee would be about £27. The £7.50 commission on buying and selling is the same.

You can also buy funds through The Share Centre, although you would have to make the purchase by phone.

The big attraction here is the website, which does a good job of demystifying the business of share dealing. It is packed full of useful information, presented in a clear and straightforward style. The SharePicker tool, for example, is a great, step-by-step guide to selecting shares.

And that’s not all. If you sign up for the Trader account, you can get free investment advice. The Share Centre is good for novice dealers, but it really suits all types of investor — and most budgets. Visit share.com.

---

3 Hargreaves Lansdown

You might know Hargreaves Lansdown as an independent financial adviser, but the firm also runs good online services under the Vantage brand.

There is no management fee on the Share account, but you have to pay £9.95 each time you trade, up to a maximum trade value of £499. If it’s any higher you pay a higher fee, up to the top rate of £29.95 if you are buying or selling shares worth more than £20,000. But the £9.95 has been cut to £4.95 for the first 30 days, so trade as much as you can in the first month.

There is a typical annual management charge of 0.5 per cent on the Isa account, allowing you to buy a range of funds online and at a discount.

Hargreaves Lansdown is not always the cheapest online stockbroker, but you get a lot for your money. The site is comprehensive, as befits one of the biggest IFAs. The company is also ramping up its research. If you sign up for the Share account, you get not one but three newsletters a month, worth £96 a year. It’s a good all rounder, with the comfort of IFA backing.

For more investment articles visit www.timesonline.co.uk/invest

Times Recommends

• How to sell your home in a downturn
• How to boost your spending power
• Unemployment benefits explained