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How to hold shares?
Posted: 31 May 2011 17:40:11(UTC)

Joined: 08/07/2009(UTC)
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I have a number of holdings in certificated form that I’ve had for some time, and I’ve also got a reasonable amount of cash that I need to invest fairly soon. I plan to open an online execution-only account, and I don’t want to use a nominee account. I therefore have to chose whether to open a Crest personal membership account or to keep my holdings in certificated form. A personal Crest account seems more efficient, but I wonder what experience other people have had of using one of these? Have there been any problems? Few online platforms seem to offer them. I’ve found just Stocktrade and Fastrade so far. Which would you recommend? Would I do better to stick with share certificates, even though the paperwork is a bit of fiddle and dealing costs can be higher? Opinions from all you experienced investors would be greatly appreciated.
William Dickinson
Posted: 31 May 2011 19:12:30(UTC)

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It will largely depend on how frequently (or infrequently) to buy and sell your shares. If they are relatively "static" long-term investments and you don't intend to monitor the market on a daily basis to pick an ideal moment to buy or sell shares I don't see a problem with keeping them in certificate form apart from the risks in losing the certificates.
Roger Lawson
Posted: 31 May 2011 19:30:32(UTC)

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I have had a personal crest account for many years and it works very well. Much better than bothering with share certificates which generally cost more to trade, with delays due to postage, the risk of loss, etc. In essence, I would recommend a personal crest account over any other method of holding and trading shares, and it should not cost you more than a nominee account if you pick the right broker (although they may be wary of setting one up unless you trade reasonably frequently).

Roger Lawson

Posted: 31 May 2011 19:34:38(UTC)

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As I am a long term investor and rarely sell I always buy shares in their certificated form. Yes, dealing costs are higher but to me that is irrelevant as the buying costs very soon iron themselves out when the first dividends come in. I feel very much more in control of my personal holdings. I tend to buy 5 or 6 tranches of shares per year.
I have been buying shares using this format since 1968 and have never found the paper work that onerous. You just have to make sure that you have a safe secure place for the certificates. No problem really. If the worst happened and you lost a certificate you would have to get the Registrar to issue you with another one, at a nominal cost, before you are able to sell. Dare I say this has never happened to me yet.
By the way, some of my old American stock had some wonderful ornate shares certificates which I have had framed.
Roger Lawson
Posted: 31 May 2011 20:13:10(UTC)

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I have no doubt that share certificates can be used if you wish (I still have a few in odd companies such as VCTs), but there are no significant advantages to trading with them while there are some disadvantages. With a personal crest account you get quicker settlement for example, and as you are still on the share register you get all the usual advantages of information, enfranchisement etc. I rate share certificates second to a personal crest account, with nominee accounts last. Share certificates are really only suitable at all for those who rarely trade - for example try selling those shares when you are away on holiday (an easy thing to do over the phone or electronically if the shares are in a personal crest account). You are also much more vulnerable to fraud if you use share certificates.
Keith Johnston
Posted: 31 May 2011 22:39:54(UTC)

Joined: 30/11/2010(UTC)
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JEL G might be surprised at the replacement cost of a certificate if he ever has the misfortune to need one.
Tom Bourne
Posted: 31 May 2011 22:45:12(UTC)

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I have used Stocktrade for many years - dealing costs are reasonable and there is a £40 annual charge (you can also use the telephone if you do not have access to a computer at anytime). However there are some shortfalls where DRIPs are concerned some have to be requested for each dividend which can be a bit of a problem if you are on the move for any length of time. They also seem to have problems with base cost information when there are scrip, rights or DRIPs involved with your holdings.

I am currently moving a portion of my portfolio to a FasTrade account - the annual charge is only £10 and they have confirmed that they are willing to accept a continuing request for a DRIP. FasTrade seem to have some other on-line benefits, which I shall be attempting to use in the future - if I can understand them!

It would be useful for all concerned if a thorough comparison between these two (plus any others that offer similar services) were to be available! Is this a possibility? If it were available Islander would have a better idea of which to use for his growing portfolio.
Roger Lawson
Posted: 01 June 2011 08:58:37(UTC)

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FasTrade have a very useful real-time share price display system where you can monitor the whole of your portfolio (and other shares you don't hold).
David B
Posted: 01 June 2011 09:53:59(UTC)

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I looked at selling some shares in Merchants Trust that I have held for a long time in certificated form. I enquired of my broker the cost of selling and the response was "On a bargain with a consideration of c.£14,000 total commission will be £150.50. We also charge a certificated transaction charge of £7.50." Bearing in mind I generally trade online at around £12.50 per transaction I thought this was eye-wateringly expensive. For other reasons I decided not to proceed in the end but if anyone knows of a cheaper way of selling I would be interested to learn
Posted: 01 June 2011 11:59:06(UTC)

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Thanks very much everyone for your really helpful replies. I'm tending very much towards a personal Crest account, as I do find certificates a bit of nuisance, particularly having to be at home to receive and respond to the paperwork at the critical time. And I'm reassured that Tom and Roger have used Crest without problems, though it would be good to hear from more Crest users.

I've just done some cost comparisons. Using Stocktrade, a £10,000 trade would cost £40 plus an annual £40 Crest fee, and Fastrade would cost £11.50 plus a £10.24 annual Crest fee. Using certificates, though, the costs are much higher: £110 with Hargreaves Lansdown and £175 with Barclays. With several trades of £10,000 a year, these differences are clearly very significant.

Tom's suggestion of a thorough comparison between Stocktrade and Fastrade and anyone else who offers personal Crest membership, is an excellent one. An analysis of how useful their websites are, and how easy they are to use, would be very helpful.
D G Stonebanks
Posted: 01 June 2011 17:42:20(UTC)

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I have had a Fastrade Crest a/c for a few years - not had any major problems
masud butt
Posted: 02 June 2011 00:07:00(UTC)

Joined: 21/01/2011(UTC)
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I handed over all Certificates into my account to Interactive []. 10£ to sell or buy new shares. No other charges.
Roger Lawson
Posted: 02 June 2011 07:58:56(UTC)

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That's a nominee account with lots of disadvantages (you lose your rights as a shareholder to vote, receive information, etc). See for a simple explanation of the differences between nominee accounts, personal crest accounts and share certificates. I would absolutely not recommend using a nominee account if you can avoid it.
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