Certificated shares with Equiniti: options for cutting commission costs?

elwy

I hold certificated Prudential shares and Equiniti is the registrar. The last time I sold some of these shares it cost me around £200 in commission. I'm trying to investigate what I can do to cut those commission costs and I've read that I can ditch the certificate by transferring the shares into a nominee account.

From there, I'm getting a bit confused. It seems Equiniti charge reduced commission if I switch to Nominee:
http://www.shareview.co.uk/4/Info/Portfolio/Default/en/Home/Products/Documents/RatesandChargesCertificated.pdf
This shows a commission rate of 1.5% for certificates and 1.0% for Nominee dealing. That's an improvement but still seems quite high.

Then there's this which shows a flat £12.50 fee for dealing in shares but I don't understand the difference between this and nominee shares:
http://www.shareview.co.uk/4/Info/Portfolio/Default/en/Home/Products/Documents/RatesandChargesIAISA.pdf

I've also seen that other platforms have similar low, flat charges for share dealing. E.g. TD Direct, the platform I use for funds, also charges £12.50 for share dealing.

So my question is what do I have to do to get that low £12.50 charge for selling my shares instead of paying a percentage commission?

Also, I'd like to sell some shares before the end of the tax year so is it possible to get the transfer done in that timeframe?

Thanks.

grey_gym_sock

it's a bit confusing, since equiniti offer various different services ...

to get the flat £12.50 dealing, you'd need an "equiniti investment account" - see http://www.shareview.co.uk/4/Info/Portfolio/Default/en/Home/Products/Pages/Investment-Account.aspx - which has links (on the right) to open an account (hopefully immediately) and to move certificates into the account (by downloading a CREST transfer form, and posting it to them, with the certificate).

that is a similar process to how you'd transfer a certificate to TD direct, except that you don't need to open an account if you already have one. (if you only have an ISA with them, you need to open a trading account.)

(equiniti's "corporate sponsored nominee" (CSN) is a different service, which you can ignore. probably used as the default option for companies with employee share schemes.)

after posting a certificate, it might take a week for a shareholding to show up in an account. should be fine within this tax year, but it's a good time to get on with it to make sure.

bowlhead99

You are looking at two different things there.

The first link with the percentage basis is for paper shares or a special "corporate sponsored nominee" service in a situation where the company concerned (the one whose shares you own) is paying Equiniti (sponsoring them) to run a nominee service with electronic certificates and bringing the end price to the investor down to 1%/£15 minimum. Some large companies do this to make it easier for their investors but not all. It's not the cheapest solution, but helps their investors get away from the highest prices and saves those investors shopping around among lots of brokers when they don't want to trade much anyway.

The second link is an alternative service which equiniti have started to offer which is more like the popular cheap execution-only stockbrokers (like TD) would offer, with fully electronic accounts which can hold shares from lots of companies: either an ISA account with an annual fee or an unwrapped "investment account". I think they bought the business off someone else but can't remember the details. Anyway, with that one you just pay £12.50 a trade flat fee and do it online like you could at TD. All the holdings are electronic via their nominee, and in this case it's not a particular "corporate sponsor" with only a limited range of shares, it's a more normal offering.

Obviously this second, cheaper, service is a rival to their limited corporate sponsored nominee service, and is the one you want, of the ones they offer.

If you phoned them up they could probably tell you how to get going with that service by opening up an account with them. Per the rate card, transfer in of your paper certificate is free and there are no costs to close after you have sold.

Alternatively if you already have an account with TD, simply send TD your certificate and they'll put it in your account in electronic format, takes a few days to transfer it into their nominee name and appear electronically, loads of time left to sell later this month before tax year end.

That's assuming the TD account is a normal unwrapped one that can take share certificates rather than an ISA which can only take cash contributions. If your TD one is an ISA you'd have to also open up a non-ISA account to receive the shares, but it's easy enough and TD's ongoing admin fees on normal trading accounts are waived if you have an ISA

elwy

Thanks, I assumed I had an Equiniti investment account since I can see my shares online through their ShareView service but I guess it's not. I'm not sure what it is, I didn't set it up.

I have a TD Trading Account that's attached to my ISA - I think you get one automatically but I've never used it. Unfortunately their transfer page says:

"The transfer process is usually completed within 6 weeks, however it can take up to 12 weeks depending on the investments you hold."

So at best that would still take me out of this tax year if I transferred to them. Perhaps using Equiniti would be faster - I'll investigate their Investment Account further.

Thanks for helping to clear things up!

Edit: I spoke to TD Direct and certificated shares can be transferred within 5-7 working days. It's only electronic shares that are transferred from broker to broker that can take 4-6 weeks.

elwy

I have a question regarding financial compensation.

Here is information regarding protection provided by TD Direct:
https://www.tddirectinvesting.co.uk/~/media/uk/pdf/disclosure-doc-money-and-inv.ashx

"Cash and stock held with TD Direct Investing is covered by the Financial Services Compensation Scheme (FSCS). This means that if TD Direct Investing is unable, or likely to be unable, to pay claims against it, customers can apply to the FSCS for compensation. Any claim will be limited to £50,000 per individual."

So I already have in excess of this protected amount in my TD Direct S&S ISA.

Is it a bad idea to move a further £60k worth of shares into a TD Direct trading account?

I was thinking of transferring the shares to TD Direct mainly for convenience, since my accounts would be linked. Would I be better off keeping them with Equiniti or another broker such as Hargreaves Lansdown for the sake of spreading my assets across different institutions for compensation purposes?

Linton

Lots of people hold £100Ks or even £Ms worth of investments with a broker. For share/fund investments held through a broker the FSCS protection is almost certainly irrelevent as your investments remain owned by you. The broker and fund manager merely have a right to manage them and if either goes bust the assets will be moved elsewhere. This is unlike a bank where your deposit becomes the bank's property and so available to pay the bank's debts if necessary. It is difficult to think of a realistic scenario where the broker's FSCS protection would come into force. Perhaps a massive fraud would do it, but that is pretty unlikely in a mainstream regulated company.

One possible exception is cash where I guess the broker's bank accounts wont be covered by FSCS. But then you are unlikely to hold >£50K cash long term in your account.

elwy

Thank you. I got a bit worried after I came across this article which seemed to paint a fairly grim picture:

"And of course, fraud like this is most likely to happen when the firm is on the edge of collapse, needs cash or assets to meet its own liabilities and the temptation to ‘borrow’ client assets for a while to tide them over becomes too great – or simply when the management decides it’s time to loot client assets and retire somewhere with no extradition treaty."
https://the-international-investor.com/investment-faq/stock-broker-account-safety

Perhaps I took it too seriously!

melbury

I like having a certificate, makes me feel that I own the shares.

elwy

melbury wrote: »

I like having a certificate, makes me feel that I own the shares.

I think owning a share certificate makes sense if you want to have an active voice and feel like a part of the company, but otherwise I don't see the point.

Up until last year, I'd only ever dealt in funds electronically and I wasn't used to share certificates at all. The first time I sold certificated shares I had to pay £200 commission. I was also very nervous about sending the certificate through the post - sure, I can pay an extra £7 to send it by special delivery but the registrar simply sends it back to me via ordinary mail. If it gets lost it would cost me between £400-£600 to get a replacement share certificate, not to mention a lot of stress and hassle that I'd rather not have to face!

I can't wait to get this certificate lodged. £12.50 in commission fees and and no worrying about the vagaries of the postal system, what's not to like!

faddy

I have some Royal Mail shares held by Equiniti as CSN and which I'll probably be selling in the near future. Would it be possible/advantageous to open an Investment Account via which to sell them or should I just follow the Buy/Sell link from Shareview Portfolio and pay the £15 flat fee?

Vortigern

faddy wrote: »

I have some Royal Mail shares held by Equiniti as CSN and which I'll probably be selling in the near future. Would it be possible/advantageous to open an Investment Account via which to sell them or should I just follow the Buy/Sell link from Shareview Portfolio and pay the £15 flat fee?

If you can sell through Equiniti CSN for £15 it's not worth the effort of transferring the shares elsewhere to sell for £12.50 or even £5.95