With advisory, the broker makes suggestions and the decision to buy and sell is yours.

With discretionary management, the broker actively manages your portfolio according to a strategy you agree. He buys and sells without referring to you. Some brokers charge for a discretionary service, while others provide it free to regular customers. Most experts say that investors need a minimum portfolio of £50,000 to make it worthwhile using a discretionary service.

Choosing winners

Picking the right shares involves careful research. If you only want to invest in a few companies you would have difficulty creating enough variety to keep the risk down. Before buying, it's a good idea to run a phantom portfolio. Follow the market, buying and selling shares without actually handing over cash. It will give you a good feel for the process and the risks.

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Charges

Remember to take into account dealing fees, effectively the commission that a broker takes. Competition has driven charges down and you can now trade for as little as £10. You will also have to pay stamp duty when you buy shares. This is a government tax on the deal and is 0.5% of what you pay for the shares. A share price quoted in newspapers is not the price you will buy or sell at, it is simply the average of the buying and selling prices, known as the bid and offer prices. Expect to pay more than the printed price and sell for less.

Wealth warning

Before taking the plunge remember that market sentiment makes investing in shares a risky business and most experts recommend buying a range of shares in different sectors of the market - it's the principle of making sure you don't end up with all your eggs in one basket.