How to buy Legal & General shares

Legal & General provides a variety of financial services such as investment management, life insurance, and pensions. Learn about the history of the company and its future outlook in this handy guide.
By: Charlie Hancox
Charlie Hancox
Alongside his passion for trading, Charlie has represented Great Britain and won national championships as a water polo player,… read more.
Updated: May 18, 2021
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This page explains the key things you need to know about Legal & General shares. We take a thorough look at its recent market performance and explain the key factors that affect its stock price.

Compare the best Legal & General trading platforms.

If you know everything you need to know about Legal & General already, you can head straight to one of the brokers below. Otherwise, scroll down to keep reading for more helpful tips and advice.

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We have broken down the process of investing in the stock market into 5 easy-to-follow steps to help you get started.

  1. Choose a broker. The first thing you need to find is an online brokerage platform. There are many different options to choose from, each with its own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure, or check out our apps page.
  2. Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally, you can expect to have to provide your name, email address, phone number, and some form of photo identification.
  3. Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Legal & General shares.
  4. Place an order for LGEN stock. Search for Legal & General’s ticker symbol (LGEN) and see the current price at which the stock is trading. If you’re happy with the price, enter the number of shares you wish to own and place your order.
  5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Legal & General shares will be listed in your account. Congratulations, you’ve just bought shares in Legal & General!

Legal & General is a multinational financial services provider that was founded by six lawyers in London way back in 1836. It now stands as the second-largest institutional investment firm in all of Europe, holding well over £1 trillion in assets. The company has achieved this by offering a variety of financial and asset management products to its over 8 million customers.

The company’s overarching ambition to ‘build a better society’ means it has a track record of investing in societal initiatives like public transport and property development, and this has continued with its Future Cities business, which aims to regenerate 15 towns and cities across the UK for close to £1 billion.

It has managed to combine these positive social campaigns with a profitable business model, meaning it has the best of both worlds: a good reputation with investors and plenty of revenue. Thanks to its success, Legal & General became a publicly-listed company on the London Stock Exchange in 1979, and it is now part of the FTSE100 index.

The company’s share price has fairly stagnant for the last 5 years. However, the company’s dividend yield has remained a strong 6.5%, even during the volatile economic conditions created by the pandemic. Moreover, this dividend should be sustainable moving forward, and it shouldn’t be detrimental to future prospects of share price accretion.

The reason for the lack of recent growth is falling profits, primarily due to the impact of COVID-19 on its balance sheet. It remains to be seen how well the company can recover as humanity gets to grips with the pandemic, though its vast and impressive track record suggests it should have the resilience needed to do so.

As a large-cap stock, Legal & General may provide returns to investors from share price growth, though this isn’t likely to be dramatic. Instead, investors who buy into the company’s business model can expect to be rewarded with a stable performer that pays some of the best dividends in the entire FTSE 100.

The answer to this question varies based on who you are as an investor. If you are someone who wants to invest in company’s that offer stable returns for the long term, Legal & General could be a good choice. Make sure to conduct due diligence before investing, and decide a price that you want to make your entry at. With solid fundamentals, the company could be poised for growth as the impact of COVID-19 dwindles.

For short-term traders with a more fast-paced strategy, you should focus on technical analysis when finding the right time to buy and sell. By noticing patterns, both in Legal & General’s market performance and the wider market, you can identify trends and make educated predictions. Legal & General isn’t the most volatile stock due to its size, meaning it may not be the best option for traders.

Regardless of your own investment thesis, make sure to keep informed about the company with the latest market analysis:

What to do before buying shares

You should always take the time to research a stock fully before investing your money. The more knowledge you have, the better your chances of making a wise investment. With that in mind, here’s a checklist to run through before you start.

  1. Research the company. You should always examine the fundamentals of a company before you put money into it. What is Legal & General? How did the company get its start? How did it grow? Is Legal & General’s revenue and profit growth picking up? Is the company innovating? The more you know about Legal & General, the better positioned you’ll be to make smart investment decisions.
  2. Make sure you understand the basics of stock investing. Make sure you have an understanding of what the market is how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
  3. Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
  4. Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
  5. Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Use our broker reviews to find the right platform or stock app for you.
  6. Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. While if the market is looking bullish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Follow the news to stay on top of the financial markets.

What is the difference between buying, selling, and trading shares?

If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade Legal & General shares. Here’s a quick run-through of what’s involved in each.

Buying Legal & General

This process involves finding a broker and placing an order for Legal and General stock, as outlined in the steps further up this page. Ideally, you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.

Selling Legal & General

When you sell any Legal & General shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit. 

When you sell is up to you. You might decide to hold for the long term, hoping to benefit from the company growing steadily throughout. Or, if you see that Legal & General’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.

Trading Legal & General

Trading is the same process as buying and selling shares, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.

You can trade Legal and General shares through share dealing, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.

Share dealing vs CFD trading

When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.

Here’s a quick summary of the two approaches, and the pros and cons of each.

Share dealing 

Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.

When investing your money this way, it is important to do a thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter-term peaks and troughs.

Pros

  • Can build wealth over time to achieve financial goals
  • Don’t need to be very reactive to short-term market movements
  • Some stocks will give you an income through regular dividend payments

Cons

  • Takes a long time to realise any profits
  • Your capital is tied up in stocks and cannot be used for other investments

CFD Trading 

If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.

One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into LGEN shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.

When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.

Pros

  • Can generate fast profits if you read the market right 
  • Some platforms allow you to trade with leverage
  • Prevents your capital being tied up so you can take advantage of investment opportunities

Cons

  • Trading with leverage is risky and can lead to big losses
  • Doesn’t necessarily generate growth over the long term

Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, use our trading course and read our guide to CFD trading to get you up to speed. 

How to choose a broker

With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large, these are the aspects you should be considering when selecting a broker:

  • Range of stocks available. The most important thing is that you can actually find your shares on the broker you choose. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as cryptocurrency, commodities or forex.
  • Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
  • Regulation. You should only use regulated brokers. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
  • Payment methods available. You might want to fund your account with a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
  • Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
  • Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.

Latest Legal & General news

Legal & General Group plc (LON: LGEN) said on Wednesday that its operating profit posted a slight decline in 2020, amidst the ongoing Coronavirus pandemic that wreaked havoc on businesses from across the globe last year. The company, however, expressed confidence that it will return to profitable growth in…
Legal & General (LON: LGEN) said on Wednesday that its operating profit in the first half (H1) of the current fiscal year came in 2% lower at £1.13 billion attributed to the Coronavirus pandemic. Previously L&G expressed plans of issuing debt in June. Shares of the company opened…
Legal & General (LON: LGEN) said on Tuesday that its assets under management (AUM) saw an 8% growth in the past 2 months. To further benefit from the favourable market conditions, the British life insurer announced that it is now considering issuing debt. L&G sold its General Insurance…
The FTSE 100 looks set for a positive start this morning, with worries over the US-China trade war starting to abate. Despite the earnings season starting to wind down, investors will still have some updates to look out for, with some blue-chip asset managers reporting today. FTSE 100 seen steady…
Rolls-Royce’s share price (LON:RR) has climbed higher in London this morning as the company announced that it had completed a deal transfer some pension liabilities to Legal & General (LON:LGEN). The update comes after the company recently said that it remained confident in its underlying operating profit and…

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Charlie Hancox
Financial writer
Alongside his passion for trading, Charlie has represented Great Britain and won national championships as a water polo player, and as a budding film director, has… read more.