Santander Share Rip-off Charges?

GreenArrow

A relative's husband died recently, and I have Power of Attorney for his widow. He had a few Santander shares (83) which I'm trying to get rid of on her behalf, and I can't believe the level of charges that we're being faced with.

First there's a £45 admin fee and also a £34.50 "countersignature fee" as we don't have "letters of confirmation" (we're in Scotland - Scottish equivalent of "probate" and would cost over £200 from the sheriff court). So £79.50 on shares worth just under £400! If the shareholding is over £200 these fees are fixed, so the smaller the shareholding the higher percentage these represent. And then there's whatever brokers' fees to sell the flaming things after they're transferred.

Is there any way to avoid or reduce these fees, and am I the only one who thinks that companies are taking the **** out of small shareholders? How can a fee of £79.50 be justified for someone tapping a few keys on a computer?:mad:

Thanks for any advice...

bowlhead99

This is going to sound blunt which is never what you want after a bereavement, but hey ho.

The grim reality is that small amounts of ownership shares in individual companies are not particularly efficient. If he had wanted to sell them himself, it would have cost him some money (those "brokers fees to sell the flaming things") anyway which would have been a decent proportion of the overall value (probably as much as a year's worth of dividends). Small amounts of shares are not worth it for most people.

You would expect a company to charge for transferring the assets, the rights and obligations of share ownership, to someone else. It is hassle that they did not ask for. It is not their fault that the person died and no longer wants the shares because he's dead. That is his fault.

Take me for example: I have not died, and so the company does not have to do any work to transfer my shares anywhere, so I am not paying £45 of administration. One way of doing it would be that I could pay £22.50 a year service fee, even though I don't need any services, and then when your relative's husband died they can get away with charging only £22.50 to your estate because they already have enough fee income coming in (me and you between us) to cover the costs of maintaining a salaried workforce, renting a building, building a systems infrastructure etc to be able to provide the transfer services on demand for relatively low cost. However, as the person that does not die and does not need a transfer service, it would be quite expensive for me and I would not like that.

You mention the fees are fixed as he has something other than the tiniest shareholding. That goes both ways. Imagine he had 1000 shares worth £5000 and they wanted to charge you £50 admin fee. You would say 'hey, that's not fair, John Smith over there only has £500 of shares to transfer and is getting away with £5 fee. The work you are doing to transfer my 1000 shares is no more work for you than it is to transfer his 100 shares! Why must I pay 10x more, you are still spending the same time at the keyboard! This is outrageous!" And you would be right. So, they came up with a system where it is all nice and fixed price, and fair. But then you complain that "the smaller the shareholding the higher percentage they represent". You can't have it both ways of course.

You also mention the countersig fee because you don't have letters of confirmation. So, not only do you want them to handle a change of ownership, which they have a standard admin fee for, you cannot prove using the standard recognised method that you have the right to instruct the transfer of ownership. Or at least they need to be provided with forms / evidence and take a gamble that it is all above board on the balance of probabilities, and have a big mistake to unwind if it turns out not to be.

You want the documents to be countersigned which is inevitably extra work that would not happen if, say, I was alive and wanted to transfer ownership to my sister, or I was not alive and my executor who had the standard letters of confirmation wanted to transfer the ownership to my sister. You (or the relative's dead husband) are causing them to do some work that they don't have to do every day - so there are some fees.

I do sympathise for your loss and you are right that the combined fees are a large portion of the asset value. However, if you've ever tried to run a business you'll see that this work has to be charged for somehow - if it is given away for free out of sympathy then the other customers pay for it or the business owners pay for it in greater expenses or lower revenues, which is not really fair because they didn't want your relative's husband to die any more than you did.

As for advice - there is not much you can do. Ask them if there are any other options. Is there some value in applying for letters of confirmation to make other parts of the estate admin cheaper / easier, even if there is a fee for it, and save money on this little piece of it as well as a bonus? You mention there will be more fees to sell afterwards - do you even need to sell them or would some heir like to have them as they are?

The solution for other relative's husbands out there is to ensure that when you go you have a lot of assets so that admin charges are a small percent of them ; or alternatively transfer the assets to wives or heirs while you are still alive; or alternatively hold simple assets which are not so inefficient to hold, sell and transfer.

GreenArrow

It's the fees on top of fees that I object to, and I'm skeptical that the individual shares in my wife's aunt's case (it's her husband that's died) will receive individual attention from Royal Sun Alliance - I bet that Santander / Iniquity have a general policy to cover this sort of case. You quote the example of "John Smith over there" - well if there's a greater value there's a greater risk - I would expect to pay more to insure a Ford Mondeo than a Ford Ka.

I bet there's thousands of folk in this situation with no idea that this sort of pitfall awaits their relatives when they die. A bloke at my work told Santander just to keep his dad's shares when he died as it would have wiped out their value in fees to claim them. A nice way for multi-million pound businesses to gradually pull shares back into the hands of other multi-million pound businesses. This sort of thing just compounds the image of banks in the wake of the cash and bankers' bonuses situation. Just rip off all the folk who got a few shares in the demutualisations.

I have no problem with an admin fee for processing the shares, but why on earth does it have to be almost £80? Twenty quid or so and I wouldn't be bothered. As to the letters of confirmation, this is the last thing to be done for the estate - the only shares he had (due to a demutualisation years ago), so not worth it as an alternative. Again, the whole system seems designed to make the lawyers and bankers richer and the rest of us mere mortals poorer.

I think I'll take your advice regarding my own shares and transfer or sell them myself as I near retirement (my wife's aunt has now had to move into a home so any savings will be gone in a couple of years anyway)... Only trouble is, none of us really know when we're going to go...

jimjames

GreenArrow wrote: »

I think I'll take your advice regarding my own shares and transfer or sell them myself as I near retirement (my wife's aunt has now had to move into a home so any savings will be gone in a couple of years anyway)... Only trouble is, none of us really know when we're going to go...

If you only have a few shares in a demutualised company then you're probably better off selling asap rather than waiting. You could put the money into funds in an ISA which will spread the risk too.

Sometimes companies offer special rates to deal in their own shares which might make it cheaper - but some brokers do online deals for under £10.