Share dealing charges

minorman

What are the views of you all re the following ?  We are novices now in buying and selling shares.  Certificates were easy but now CREST is preferred.  We have found that at first glance holding shares electronically would be a good idea  BUT  .... when you want to sell or do some other action the "holder" charges an awful lot for doing it. My wife holds 52 shares in Lloyd's bank and 52 shares in Lloyd's bank in her name as executor of her mothers will. She wants to sell them but not only does she have to run the risk of "bid and offer" prices the holder will charge quite a high price per share per 52 (not allowed to consolidate apparently at the same time) so in the end she could get very little back.  Ditto for 2 large batches of NGrid shares she holds in certificates. The company in question is Equiniti who are offering to sell the NGrid shares as well. They have been the most difficult company we should ever wish to deal with.  £10.50 per deal ??.  Pah !

eskbanker

A holding of 52 shares in Lloyds is worth about £15 at their current price, so transaction costs will inevitably overwhelm a tiny amount like that - given the lack of realisable value I'd hang onto them in the hope that they'll bounce back to something a bit more worthwhile in the future.

minorman

If I remember they wanted 30p per share for selling and the amount would be more than the shares were worth then..  That would probably meant we would have had to pay them to take the shares off of her hands. The NGrid charges are high as well, far in excess of say a £ 10.50 deal through a broker.  We used to deal through a broker but they dropped us as we did not do enough deals.  Selling through a bank also means you don't  get the bid price you see .. we have been caught by that one as well in the past.

bowlhead99

minorman said:

She wants to sell them but not only does she have to run the risk of "bid and offer" prices the holder will charge quite a high price per share per 52 (not allowed to consolidate apparently at the same time) so in the end she could get very little back.  Ditto for 2 large batches of NGrid shares she holds in certificates. The company in question is Equiniti who are offering to sell the NGrid shares as well. They have been the most difficult company we should ever wish to deal with.  £10.50 per deal ??.  Pah !

The NGrid charges are high as well, far in excess of say a £ 10.50 deal through a broker.  We used to deal through a broker but they dropped us as we did not do enough deals.

If the NGrid shares are 'large batches' of shares and each share is worth about £9 each, so the batches are worth hundreds or thousands or tens of thousands of pounds each, it is obviously going to be more viable to sell those through Equiniti than it is going to be to sell the Lloyds shares where your wife only has ~£15 shares for her own account and £15 shares for her mother's account.

As you mention, you don't do enough business to deal with a broker on an ongoing basis and most brokers are not going to want to establish a relationship with a dead person's estate for one-off trading revenue of £10.50 on the disposal of a small amount of shares. So it's unsurprising you are facing fees of more than £10.50 per trade. 

The National Grid shares have fluctuated in value between £8 and 9.50 over the last month (i.e. about 5% higher and 11% lower than today) though the price range this year has been more like 25% if you go back a couple of months. As nobody knows what the share price will do from one day to the next, if her duty as executor is to sell them as soon as practicable for best value available, she may be better off using the expensive but quick Equiniti process to sell them as soon as possible rather than try some slower and marginally cheaper process with some different broker whom she hasn't yet identified, after the share price has fallen further.

One option (especially for the tiny amount of Lloyds shares) would be that if she is a beneficiary of the will and the other beneficiaries are amenable, it may be feasible for her to arrange for the shares she holds as executor to be distributed/transferred to herself as beneficiary - and give up her rights to some other agreed asset of equivalent value -  and then she would have one pot of shares instead of two, and halve the overall disposal costs, assuming the share registrar does not charge much or anything for processing a transfer.  If the other beneficiaries are likely to be 'difficult' about that or she doesn't want to faff around for everyone to agree to a deed of variation to make it all above board, it may be more efficient to just have the two sets of charges, even if they feel punitive. 

Selling through a bank also means you don't  get the bid price you see .. we have been caught by that one as well in the past.

If you are using a broker you will get a price as good or better than the one you agree. If you ask for the broker or the customer service part of a bank's sharedealing division to sell the shares 'at best' and all you have to go on is a bid price for 'normal market size' which is out of date the second after you look at it (and sometimes 15 mins before you look at it, if you are looking at the most recently available free price info from the stock exchange that gets published with a rolling delay), then you might get a worse price than the one you were looking at.