In theory, of course, everyone has always been allowed to invest on the stock market – the purpose of it is for companies to be able to raise capital and as such the more investors available, the better for the company.
But until the 1980s, it was the preserve of the elite, who had access to the financial advisers and bankers who would be able to carry out their wishes.
The big change happened with the Big Bang, which revolutionised the exchanges, and made them far more open to everyone. Suddenly every local bank began offering share dealing services to anyone with a few pounds to invest. This combined with the dozens of privatisations of the UK's nationalised industries, creating a nation of not just shopkeepers but shareholders.
Then came the internet, making it even easier to invest in the markets. Virtually every bank and building society, along with a range of specialist providers now has an online share dealing product.
Broadly, they are all very similar. They are what is known as execution-only, which means they will act only on your orders – they will not give advice on what or when to buy and sell, so the responsibility is completely yours for your investments.
Charging
The charging is twofold – a per transaction cost and a management fee. The per transaction cost is simple; every time you buy or sell shares you pay the provider a fee – normally a flat cost, but occasionally it's a percentage of the value of what you buy and sell. So every time you carry out a transaction you pay that amount.
The management fee covers the administration of your shares – the provider will carry out a number of functions for you – ensuring your details are maintained on the shareholders' register, collecting dividends and managing any voting rights you may have. The services they offer differ, so you need to be sure what it is you want.
It's the combination of these two fees that are the deciding factor for most investors. If you only buy and sell very occasionally, a higher transaction fee and low – or no in some cases – management fee is a better bet, but if you are a regular trader the higher management fees will be offset by the lower transaction costs. Management fees vary wildly, but can be from zero to around £15 per month. Transaction costs are normally £10-20.
Market services
The simplest – and most popular – services allow you to trade on the main stock market. This is where the majority of the UK's publicly listed companies can be bought and sold, with the FTSE100 the list of the country's largest 100 companies, the FTSE250 the next 250 largest and so on. It's here you'll find the best-known firms, including the big beasts of the UK business market.
Some share dealing services offer access to further markets. The Alternative Investment Market, or AIM, is the market for smaller and younger firms and generally offers greater possibilities of returns, though at greater risks. Some technology companies list on the European Nasdaq, which is the little brother of its US counterpart.
And other services will allow you to take your investments further afield. Some companies will allow you to buy and sell shares on the US or larger European markets. You can also invest in Exchange Traded Funds (ETFs), which offer a 'basket' of shares – the idea being that you are spreading your risk.
As the market has become more competitive, share dealing sites have become more advanced. While they still rarely give advice, they often have a wealth of information to help inform your investment choices. Several also have a telephone dealing option, for those who feel more comfortable with the sound of a human voice.
Scams
If you look around the internet, you'll find plenty of information and 'advice' on picking the right stocks, but there are also a lot of con artists looking to separate you from your money.
One of the most common is the boiler room scam, which is illegal in this country – although as most boiler rooms are based outside the UK, there's not a lot the authorities can do. Potential investors are called by sales people who hype a company, predicting huge breakthroughs or investments that will see the share price soar. These companies are generally tiny, and have minimal funding or chances of success. Investors buy the shares at inflated prices and with restrictions on when they can sell – by the time they are able to sell, the shares are worthless.
If you're called and told about a firm you've never heard of, it's best to just put the phone down.
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