Best way to buy shares

melbury

In the past I have always bought shares in certificated form because I am old fashioned and like to have something tangible.

My question is, if you buy through one of the online stockbrokers what actually happens to your shares - do they just keep them in an account on your behalf and, if so, is there a cost attached?  If there is, then surely it makes sense to have the certificate and not pay any additional charges.

It is very difficult to find a firm whereby you can buy shares in certificated form now - any recommendations please?

Albermarle

My question is, if you buy through one of the online stockbrokers what actually happens to your shares - do they just keep them in an account on your behalf and, if so, is there a cost attached?

Yes to both points , although on some platforms the cost for keeping shares is pretty low , maybe even zero on some .

benbay001

melbury said:

do they just keep them in an account on your behalf and, if so, is there a cost attached? 

My ISA is with iWeb, i pay £5 per trade and paid £25 to open the account. Those are the only costs other than fx costs.

Tom99

Or if you don't need the shares in an ISA, Halifax have no charge for holding shares and you can buy for a £2 dealing fee using a one off regular contribution.

bowlhead99

melbury said:

In the past I have always bought shares in certificated form because I am old fashioned and like to have something tangible.

My question is, if you buy through one of the online stockbrokers what actually happens to your shares - do they just keep them in an account on your behalf and, if so, is there a cost attached?  If there is, then surely it makes sense to have the certificate and not pay any additional charges.

This old chestnut again .  For more than 7 years on this forum you have been popping up and rekindling the discussion about the merits of trading paper certificates vs electronic, and saying how you are old fashioned and like the paper ones, despite the large extra cost to purchase, the extra cost or time and hassle to sell, and inevitable problem and additional cost if a certificate is lost, stolen or lost in a fire etc because a broker won't deal on the promise that a certificate exists without an indemnity / insurance fee.  The 'if there is a fee for the account, surely it makes sense to get the paper certificate for yourself' does not necessarily stack up given the extra cost and hassle of certificated dealing and risk of something happening to the certificate.

Here is one of my responses to you from five and a half years ago which ended with you saying you were grateful for the info and would not be so silly about always wanting to buy paper shares in the future... https://forums.moneysavingexpert.com/discussion/comment/66107369#Comment_66107369 

Then here's a followup where you asked the same  sort of questions five years ago and I reminded you how you we had discussed that you could buy for £6 with Jarvis's cheap execution-only www.x-o.co.uk service, and hold for free or get them to convert it into a paper share certificate for £15 plus VAT. The pricing is still the same.
 https://forums.moneysavingexpert.com/discussion/comment/67908629#Comment_67908629

We discussed it briefly again the following year but I know you're stubborn and there's no getting around it - you like your paper shares

If you buy the shares through an electronic nominee account, the broker will hold them in the name of their nominee company electronically (it will be the broker's name on the company's share register). The fee structures vary from firm to firm. Some like x-o mentioned above do not currently charge you an ongoing fee for the nominee / account maintenance service, and neither will IWeb mentioned by benbay above, nor Hargreaves Lansdown. 

HL is one of the largest investment platforms with billions under administration so a 'safe pair of hands'; though they will charge you if you would like the account to be an ISA account which creates extra work for them but removes the burden of tax accounting for you.

It is very difficult to find a firm whereby you can buy shares in certificated form now - any recommendations please?

For certificates I'll go with the same recommendation as in 2014 and 2015 of just having a free account from x-o.co.uk and pay them the £18 to get a paper certificate sent out to you if you want to hang it on your bedroom wall.

But really my recommendation is to take the advice above  - that the broker keeps the shares electronically in his system - given that several brokers will do that for free because it facilitates you trading with them (rather than you picking some other broker at random) in the future. There's really no point having a paper certificate in your dresser at home and keeping the records of your tax costs and gains and income etc when it could all be in a free online account. Presumably you're willing for your bank to hold some of your cash in their paperless systems rather than wanting a pile of printed notes in a biscuit tin to make it feel more 'real'...

One thing to consider as you're getting older is that at some point it will be a pain in the bum for somebody when you die and an administrator of your estate has to sift through a load of paper certificates and work out which ones of them are still real and what the valid number of shares is after a number of share splits or restructures, while having the risk that they miss one and lose a lot of value because it fell down the back of the sofa or got nicked and they never knew about it.  If you can say before you go that, "my shares are in an account with xyz broker" they will be able to see what's what.

On the assumption that you are still not really serious about letting a broker hold your shares in a nominee account, shall we diarise for a followup in five years where you ask if anyone knows a relatively cheap way to buy a share and get a paper certificate and I suggest the x-o.co.uk service from Jarvis? 

Some countries have modernised their rules for trading of financial instruments so that trading and custody of listed companies is all paperless, with paper certificates all 'dematerialised' into electronic form. Perhaps the London stock exchange and UK-listed plcs will go that way too in due course.

coachman12

Wow----bowlhead's erudite posting seems to have put that entire topic firmly "to bed". Impressive.

[Deleted User]

My apology, bowlhead, that was unnecessarily unkind.

Yet I do think that the "nominee" system benefits the broker not the client, and is a subject worthy of debate on this forum.

bowlhead99

ZingPowZing said:

I thought it was a bit sad, coachman, saying more about the barren hinterland of bowlhead's life than the person he was putting down.

Thanks for your support, as ever 

coachman12

bowlhead99 said:

ZingPowZing said:

I thought it was a bit sad, coachman, saying more about the barren hinterland of bowlhead's life than the person he was putting down.

Thanks for your support, as ever 

I have obviously found myself in the middle of two other posters' infighting or playfulness but my earlier posting meant exactly what it said.

melbury

bowlhead99 said:

melbury said:

In the past I have always bought shares in certificated form because I am old fashioned and like to have something tangible.

My question is, if you buy through one of the online stockbrokers what actually happens to your shares - do they just keep them in an account on your behalf and, if so, is there a cost attached?  If there is, then surely it makes sense to have the certificate and not pay any additional charges.

This old chestnut again .  For more than 7 years on this forum you have been popping up and rekindling the discussion about the merits of trading paper certificates vs electronic, and saying how you are old fashioned and like the paper ones, despite the large extra cost to purchase, the extra cost or time and hassle to sell, and inevitable problem and additional cost if a certificate is lost, stolen or lost in a fire etc because a broker won't deal on the promise that a certificate exists without an indemnity / insurance fee.  The 'if there is a fee for the account, surely it makes sense to get the paper certificate for yourself' does not necessarily stack up given the extra cost and hassle of certificated dealing and risk of something happening to the certificate.

Here is one of my responses to you from five and a half years ago which ended with you saying you were grateful for the info and would not be so silly about always wanting to buy paper shares in the future... https://forums.moneysavingexpert.com/discussion/comment/66107369#Comment_66107369 

Then here's a followup where you asked the same  sort of questions five years ago and I reminded you how you we had discussed that you could buy for £6 with Jarvis's cheap execution-only www.x-o.co.uk service, and hold for free or get them to convert it into a paper share certificate for £15 plus VAT. The pricing is still the same.
 https://forums.moneysavingexpert.com/discussion/comment/67908629#Comment_67908629

We discussed it briefly again the following year but I know you're stubborn and there's no getting around it - you like your paper shares

If you buy the shares through an electronic nominee account, the broker will hold them in the name of their nominee company electronically (it will be the broker's name on the company's share register). The fee structures vary from firm to firm. Some like x-o mentioned above do not currently charge you an ongoing fee for the nominee / account maintenance service, and neither will IWeb mentioned by benbay above, nor Hargreaves Lansdown. 

HL is one of the largest investment platforms with billions under administration so a 'safe pair of hands'; though they will charge you if you would like the account to be an ISA account which creates extra work for them but removes the burden of tax accounting for you.

It is very difficult to find a firm whereby you can buy shares in certificated form now - any recommendations please?

For certificates I'll go with the same recommendation as in 2014 and 2015 of just having a free account from x-o.co.uk and pay them the £18 to get a paper certificate sent out to you if you want to hang it on your bedroom wall.

But really my recommendation is to take the advice above  - that the broker keeps the shares electronically in his system - given that several brokers will do that for free because it facilitates you trading with them (rather than you picking some other broker at random) in the future. There's really no point having a paper certificate in your dresser at home and keeping the records of your tax costs and gains and income etc when it could all be in a free online account. Presumably you're willing for your bank to hold some of your cash in their paperless systems rather than wanting a pile of printed notes in a biscuit tin to make it feel more 'real'...

One thing to consider as you're getting older is that at some point it will be a pain in the bum for somebody when you die and an administrator of your estate has to sift through a load of paper certificates and work out which ones of them are still real and what the valid number of shares is after a number of share splits or restructures, while having the risk that they miss one and lose a lot of value because it fell down the back of the sofa or got nicked and they never knew about it.  If you can say before you go that, "my shares are in an account with xyz broker" they will be able to see what's what.

On the assumption that you are still not really serious about letting a broker hold your shares in a nominee account, shall we diarise for a followup in five years where you ask if anyone knows a relatively cheap way to buy a share and get a paper certificate and I suggest the x-o.co.uk service from Jarvis? 

Some countries have modernised their rules for trading of financial instruments so that trading and custody of listed companies is all paperless, with paper certificates all 'dematerialised' into electronic form. Perhaps the London stock exchange and UK-listed plcs will go that way too in due course.

Apologies, I know I had asked some time ago, but I didn't realize that I could access old posts to get the information.