Compare our best deals for certificated share dealing

‘Paperback shares’ is simply another name for certificated shares. It refers to the physical copies of shares you get when you buy stocks in a company.

They give you rights in the company, such as receiving dividends, access to company reports and other stockholder information and the ability to vote in AGMs.

Certificated share dealing is when you trade by buying or selling paper share certificates.

Before you can begin, you’ll need to open a share dealing account that lets you buy and sell certificated shares.

Once you’ve done this, you can either add money to your account and purchase paper shares or sell your share certificates online.

More people have moved towards digital share dealing as these shares are cheaper and faster to sell. This trend has seen the number of platforms available for buying and selling share certificates shrink.  However, many brokers and platforms will allow you to transfer your share certificates to a nominated account and trade that way.  

If you take this approach, the broker or platform will be listed on the shareholder’s register. As a result, you may lose some rights, such as voting in AGMs, and may no longer receive direct communications from the company concerned. The broker or platform will take on all the administration of your shares for you.

If you already have shares in a company or companies, you might be unsure what type you have. The good news is that there are only three types, and it should be quite simple to work out which ones you have. The three types are:

• Certificated: The shares are in your name, and you get a paper certificate as proof of the number of shares you own

• Electronically held: The shares are held electronically in the name of your broker, and you’re the beneficial owner

• Personal CREST Accounts: With CREST (Certificateless Registry for Electronic Share Transfer) accounts, your shares are held electronically in a UK-based central securities depository. This allows you to preserve the rights associated with certificated share dealing while operating electronically

If you want to buy or sell paper share certificates, you’ll need to use a certificated share dealing broker, which will give you access to its trading platform.

There are several reasons you might want to sell share certificates. For example:

• You want to cash them in and realise their current value

• You’re worried paper share certificates will become a thing of the past

Our comparison shows brokers that can sell your share certificates. It can be expensive, so it’s always wise to shop around for the cheapest deal.

Most brokers charge you for every certificate you sell, but how much depends on the value of your shares. Some will offer discounts for regular traders.

For example, if you sell shares worth £50,000, you may get charged 1.50% (£750) to sell them. But if you sell another £60,000, the charge may reduce to 0.25% (£150).

Some brokers also charge a flat-rate fee - such as £25 per sale - to cover the administrative costs of transferring your certified shares into another name. 

In recent years, certificated share dealing has become too expensive for many investors. Many brokers and investment services no longer offer it as an option because commission rates have risen while rates for nominee accounts have fallen.

Dealing in any shares has risks. The value of your investments and the income you may receive can go down as well as up. This could be due to economic factors impacting the market as a whole or specific events at the company in which you own shares.

You could get back more or less than you invested. You’re not always guaranteed to make money.

The EU parliament has started a process known as dematerialisation, which is designed to put an end to paperback share certificates in the EU. This law is expected to come fully into force by 2025.

Although the UK government no longer has to stick to this timeline due to Brexit, it has nonetheless created a digitalisation task force to address how existing paper shares can be converted into digital ones while preserving shareowner rights. The task force was due to publish final recommendations and an implementation plan by the end of September 2024. This deadline has now passed without any update on when the final report will be published. 

There are several companies that will allow you to transfer your certificated shares into a digital account. However, you’ll typically have to open a nominee account and may lose some of your previous rights when doing this. Follow these steps to convert your paper shares: 

• Find a company that will allow you to transfer your paper shares. There are plenty of options, including Barclays, Fidelity, and Hargreaves Lansdown

• Set up an investment or nominee account. Some providers let you manage your own investments, while others will charge to manage them for you, so make sure you know what you’re signing up for

• Check that the provider you’ve chosen will accept your shares. Some companies, such as Fidelity, will only accept transfers for shares they offer

• Fill out a stock deposit instruction form. Then, complete a CREST transfer form (you will need a separate form for each company in which you hold share certificates). You’ll usually need to sign a CREST form by hand

• Send the completed forms and your share certificates by recorded delivery to your chosen firm