We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies. You can view our cookie policy and edit your settings here, or by following the link at the bottom of any page on our site.
The value of investments can fall as well as rise, and you may get back less than you invested. Past performance is no guarantee of future results.
A broker charge is a fee paid to an agent or company for facilitating a transaction between a buyer and a seller. It might be a charge for sales or negotiation services, or for providing advice about the transaction.
Broker charge definition
A broker charge is a fee paid to an agent or company for facilitating a transaction between a buyer and a seller. It might be a charge for sales or negotiation services, or for providing advice about the transaction.
A broker charge will usually be based either on a percentage of the overall transaction value or a flat fee.
For example, if you want to buy shares in a FTSE-listed company, your broker may charge you 0.1% of the value of the transaction, subject to a minimum flat fee of £10.
Example 1: You decide to buy 8000 shares of stock ABC, which has a share price of £1 per share. The broker charge is calculated like this:
8000 x £1 = £8000 notional value
£8000 x 0.1% = £8
As this is lower than the minimum fee, you will be charged £10.
Example 2: You choose to buy 10,000 shares of stock XYZ, which has a share price of £3 per share. Here’s how the charge works:
10,000 x £3 = £30,000 notional value
£30,000 x 0.1% = £30
As this is more than the minimum fee, you will be charged £30.
Investing news
Visit our investing news section for the latest news and analysis, and where potential investment opportunities may lie.