A survey by Investors Chronicle of private investors has found that the financial security of their stockbroker is more important to them than good administration and low cost dealing.

A poll of more than 1,300 Investors Chronicle readers found that most readers were satisfied with their stockbrokers’ administration, charges and services, but were worried about the safety of their cash and equity holdings.

This is hardly surprising given the dramatic collapse of a number of formerly sound banks and insurance companies. Investors added that stockbrokers could do more to reassure investors about the security of their investments.

For the record, if a stockbroker becomes insolvent, investors’ assets are protected up to £48,000 by the Financial Services Compensation Scheme, but in practice clients’ assets are normally ringfenced in a separate nominee account which would not be affected by the collapse of the stockbroker.

Tom McPhail of IFA firm Hargreaves Lansdown says that the chances of a stockbroker going bust are minimal, albeit possible. “There would have to be staggering levels of incompetence and a degree of wilful negligence for this to happen. Investors’ assets should be protected from the insolvency of the stockbroker itself,” he says.

Other complaints that stockbrokers’ clients voiced in the survey included complicated dealing procedures, errors and poor website design.

When asked which stockbrokers provided the best services and value for money, Hoodless Brennan was voted the Best Online Stockbroker, with investors rating it highly on administration, charges, ease of contact and range of services.

The firm also won the the award for Best Execution Only Stockbroker, Best Stockbroker for Frequent Traders, Best Stockbroker for Costs and Best Self Select ISA.

Elsewhere,  Collins Stewart Wealth Management scooped the Best Advisory Stockbroker award and Jarvis Investment Management, the Best Stockbroker for Customer Services. IG Index was rated the Best Spread Betting Firm and ishares the Best ETF provider.The most popular fund was Invesco Perpetual High Income
while SippDeal picked up the Best Sipp Provider.

For more details visit
http://www.investorschronicle.co.uk/

Read the Defaqto guide to Exchange Traded Funds
http://www.defaqto.com/consumer/investments/exchange-traded-funds.aspx

Read the Defaqto guide to Self Select ISAs
http://www.defaqto.com/consumer/investments/isas/guide-to-self-select-isas.aspx

Read the Defaqto guide to Sipps
http://www.defaqto.com/consumer/pensions.aspx

Written by PAMELA ATHERTON