Buying shares to hold

jan5656

I want to buy some royal caribbean shares to hold and enable me to obtain shareholder perks, but only seem to be able to get them via a dealing platform which levies membership/dealing/inactivity charges. Is there any other way?  I'm planning to keep them indefinitely.

Thrugelmir

Buy the stock through a broker using a nominee standard service and ask for the shares to be deregistered into your name. There'll be an additional charge for the deregistration service.  You'll then be issued a paper share certificate. 

bowlhead99

Following what Thrugelmir suggested:

X-o.co.uk from Jarvis is a cheap execution-only service - an easy way to buy shares. And then later, having bought them online through an electronic pooled nominee account (which is free to hold), if you prefer you can get them re-registered into your own name with a paper share certificate for £15+vat.
 
Once they are in your own name, you'd be on the shareholder register for the company itself and would receive shareholder communication directly from them (rather than the broker). You'd receive any shareholder perks and get the invites to the AGMs, all corporate actions and votes etc. At some point in the future if you did want to sell, you could use your choice of broker, because you would be holding the shares yourself, independently from x-o or any other broker.

The downsides of holding shares directly in your own name include:

- when you come to sell your shares, if you're not holding them in a broker's electronic nominee account it might be more expensive to sell them off paper certificates, or simply take more time to do so, during which the shares might drop in price by several percent;

- if you lose the certificates or they are stolen or burned down in a fire etc, no broker will let you sell without paying an indemnity (insurance) fee -  because they will be nervous that actually the reason you can't produce the share certs is that you already sold them to someone else the day before. The insurance cost (that you might be lying and unable to deliver the shares for settlement - while they potentially crash in price by a huge percentage over a few days) is something that a dealer would want to be compensated for and people moan about such fees here all the time.

So to summarise the cheapest way to hold shares 'forever' is to be registered as the shareholder in your own name and not use a broker on an ongoing basis at all, beyond doing the initial acquisition on the stock market, but make very sure you don't lose them because it can cost you more than you stand to save over a few years' custody fees. If you want to keep them in electronic form in a broker account, to make them quicker and easier to sell - many brokers will charge a fee for custody, but some will waive it, or part of it, if you are an active customer paying ongoing transaction fees.

Some stock exchanges e.g. Italy have gone fully 'dematerialised' and so holding the shares on paper without the help of a broker isn't possible. The London stock exchange isn't like that yet, but may happen in due course.

If you want them to be held within a tax wrapper such as ISA or pension, you will have to use a broker or investment platform to hold the shares for you, because you can't run your own HMRC approved tax wrapper. Some are pretty cheap but all the brokers and platforms have a fee structure of some kind. X-O.co.uk as previously mentioned does offer an ISA for free, though a SIPP would attract ongoing charges. An ISA is useful for saving the tax tracking paperwork.

Alexland

bowlhead99 said:

So to summarise the cheapest way to hold shares 'forever' is to be registered as the shareholder in your own name and not use a broker on an ongoing basis at all, beyond doing the initial acquisition on the stock market, but make very sure you don't lose them because it can cost you more than you stand to save over a few years' custody fees. If you want to keep them in electronic form in a broker account, to make them quicker and easier to sell - many brokers will charge a fee for custody, but some will waive it, or part of it, if you are an active customer paying ongoing transaction fees.

You don't need to be actively paying any ongoing fees to Jarvis X-O for them to hold the shares in a free nominee account which over the long term is cheaper than paying them extra to transfer into certificates and back again.

bowlhead99 said:

X-O.co.uk as previously mentioned does offer an ISA for free

On adult ISAs they charge a £50+vat closure fee compared to iWeb who charge £25 setup and have a cheaper trade cost. Although if by 'an ISA' you were referring to the Jarvis X-O Junior ISA then yes that's free provided you transfer out before 18.

bowlhead99

Alexland said:
You don't need to be actively paying any ongoing fees to Jarvis X-O for them to hold the shares in a free nominee account which over the long term is cheaper than paying them extra to transfer into certificates and back again.

bowlhead99 said:

X-O.co.uk as previously mentioned does offer an ISA for free

On adult ISAs they charge a £50+vat closure fee compared to iWeb who charge £25 setup and have a cheaper trade cost. Although if by 'an ISA' you were referring to the Jarvis X-O Junior ISA then yes that's free provided you transfer out before 18.

It is cheaper to use a free nominee account than move from beneficial ownership to legal ownership and back again or to trade directly with certificates.

But the OP's issue was that they wanted to access shareholder perks which you get by being on the share register, and that the investment platforms or brokers which allow the pass-through of those perks would typically charge a membership/inactivity fee. The perks are not generally passed on by Jarvis X-O if you hold them in the free nominee account - because Jarvis doesn't want the hassle of arranging that, because it is not charging you any money to run the nominee service.

Most UK listed companies offering shareholder perks generally validate your eligibility by looking you up on their shareholder register and therefore need cooperation from your broker if you hold via a nominee. So, the standard suggestion here if you want to get the shares and keep them indefinitely, was to use a cheap broker such as X-O to acquire the shares and then pay them a small fee to reregister them in your own name - converting the 'beneficial ownership' via nominee to direct legal ownership. 

With a caveat that I haven't actually used X-O to do that for any shares that don't have their primary listing in London and are merely traded in London (such as Royal Caribbean) it seems a sensible way to go. OP could enquire with them if that is possible before they try it.

However, some shareholder perks offered by companies in some countries don't involve them needing to find you directly on their register - and you simply have to prove that you are an owner, honest guv, by giving them evidence. To use the RCCL cabin credit, RCCL require you to prove you're an owner by giving them proof a couple of weeks before sailing, and they say that you can use (e.g.) a copy of your proxy voting forms, a letter from your broker on headed paper, or a current (eg in last 60-90 days) brokerage statement or trade confirmation.  X-O won't write you a letter but if you have recently bought the shares it sounds like you can just send them your contract note (which comes on headed paper with all the details of your purchase).

If you haven't recently bought them (because you're holding them indefinitely) and your broker won't write a letter for you and you're not a direct owner, only through a nominee, you would need to hope that the broker gives you official statements at least every 3 months and makes them available on a timely basis (because if e.g. you were travelling late July you couldn't use a March statement and would need the June one, but you'd need to have that in your hand by earlier in July to make sure RCL could process it in good time ahead of your sailing).

Alexland said:

bowlhead99 said:

X-O.co.uk as previously mentioned does offer an ISA for free

On adult ISAs they charge a £50+vat closure fee compared to iWeb who charge £25 setup and have a cheaper trade cost. Although if by 'an ISA' you were referring to the Jarvis X-O Junior ISA then yes that's free provided you transfer out before 18.

The only reason I mentioned ISAs and pensions at all was as a simple caveat to my comment that the cheapest way to do a long term buy and hold without risk of fees was to hold them yourself; but you couldn't hold them yourself if you wanted ISA or pension protection from tax.

I then mentioned that all the brokers generally have costs for holding stuff in a tax wrapper for you but mentioned that X-O do have an ISA 'for free', just as an example as I'd used that company in the earlier suggestion. The charges to close it are not really relevant if you are going to hold 'indefinitely' as they may change from time to time anyway. But as the 'for free' ISA from X-O doesn't pass on shareholder perks (like their unwrapped nominee service doesn't), you would probably need to use someone else and pony up some actual money to the broker if you wanted to get an ISA where you're helped out with pass-thru of the perks of ownership of the different companies you own.

In the case of RCCL which is a little different to most UK listed companies - because it allows applications on a self-service basis with documentary evidence of holdings, and doesn't preclude electronic / nominee ownership - you might be able to use either X-O or IWeb's ISA service and still be OK. But this is perhaps drifting off-topic as many people don't want the choice of firm for their ISA allowances to be driven by wanting to grab $400 of one company's shares to make the minimum for a shareholder discount.

jan5656

Thank you for your valuable advice. I'll check out x-o.

EdGasketTheSecond

You don't need a certificate to get shareholder perks; just request the broker to register you for them

bowlhead99

EdGasketTheSecond said:

You don't need a certificate to get shareholder perks; just request the broker to register you for them

Yes, but to do that you need a cooperative broker rather than the ones that charge you zero so don't want to do anything involving actual work because you don't want to pay them actual money.

That's where the OP got the idea that they, "only seem to be able to get them via a dealing platform which levies membership/ dealing/inactivity charges. Is there any other way?"