I hold a lot of shares in certificate form and I’m wondering if I should get a stockbroker to look after them all in one account? What would the advantages be and how much would they charge in administration fees?
The majority of stockbrokers offer a nominee service where certificated shareholdings can be transferred into one account. The biggest advantage of this is that all of your shares can be managed online, in one account, significantly reducing the amount of paperwork and making their administration so much easier.
This works particularly well for tax returns since the stockbroking service will provide easier access to information for HMRC and consolidated tax certificates. Nominee services make life easier for your beneficiaries, too, since an executor can deal with just one firm for a whole portfolio rather than multiple registrars.
You can also take advantage of tax wrappers, such as individual savings accounts (Isas) and self-invested personal pensions (Sipps), which would otherwise not normally be available for certificated holdings.
Which stockbroker or investment service you choose will largely depend upon the type of service you are looking for – whether you want to manage your share portfolio yourself or have
an investment manager/ stockbroker manage them for you.
If you are happy making your own investment decisions, a direct-to- consumer service is likely to be the cheapest option and provide additional online services and tools, including a stock screener, online trading, as well as information, research and investment ideas.
Transferring shares into this type of service is easy and is usually free.
Fees vary, so it is worth shopping around. You also need to consider what other services you value – for example, telephone helpdesk support.
Advisory or discretionary stockbrokers’ charges tend to have higher administration and portfolio management fees. A discretionary broker will buy and sell shares on your behalf, based on your requirements, without consulting you each time.
With advisory services, the stockbroker advises you about what shares to buy and sell, according to your needs, and it’s up to you to decide whether to take their advice.
Dealing costs are much cheaper using a nominee service, so even if you transferred your shares into an account to cash in, that would often be a cheaper way to do it.