Certificated share dealing accounts allow you to sell paper share certificates. Compare commission charges and fees per trade to find a cheaper certificated share dealing service.
Your investments are not guaranteed; they can decrease in value as well as increase and you may not get back the full amount you put in.
Certified share dealing is the buying and selling of paper share certificates. It’s an alternative to digitally managed shares.
Share dealing as a form of investment trading. You buy and sell shares – which are essentially units of ownership – in publicly listed companies. In doing so, you can build your own investment portfolio and could stand to make money.
A share certificate is a physical paper document that certifies the possession of shares in a company limited by shares. It usually details the shareholder’s name, which company the shares are held in, and how many shares are held in it.
Traditionally, when you buy shares in a company, your name is added to the shareholders’ register. This gives you your participation rights. Your formal share certificate is then posted by you.
You’ll be asked to keep your certificate in a safe place because replacing it can be expensive and can take a long time.
The EU has passed legislation putting an end to paper share certificates. Known as ‘dematerialisation’, no new share certificates will be issued from January 2023. This will apply across the EU and the UK. By 2025 most paper shares will be dematerialised.
Before you can start certified share dealing, 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 buy paper shares, or sell your shares online.
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 two types, and it should be quite simple to work out. The two 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|
It is cheaper and faster to sell electronically held shares, so most people prefer to do it this way these days. Your broker has to do less paperwork to transfer them and there are no delays due to the postal service. Plus, the stockbroker handles all the administration around buying and selling your shares. This means everything happens more smoothly and quickly. You don’t have to worry about it yourself.
But some people still prefer to deal in paper and therefore would rather have certified shares.
If you want to buy or sell paper share certificates, you’ll need to use a certificated share dealing broker. This will give you access to their trading platform.
There are several reasons you might want to sell share certificates. For example:
You want to realise their current value
You want to switch to electronic share dealing so you don’t have to worry about keeping certificates safe
Because 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 compare and shop around for the cheapest deal.
To sell certificated shares through a broker, you’ll need to open an account with them.
The next steps will be to:
Complete an application confirming your personal details
Share the information on your certificate as proof of ownership
Send your certificate and printed application to the broker to confirm the sale.
You’ll be charged for selling your shares, so you should look to do this as cost effectively as possible. Compare the charges and fees for each broker using our comparison.
There’s usually a time limit given when you sell certified shares. This could be around five working days. If a broker asks you to send the certificate to them, you can use a recorded delivery service. There will be a charge for this of course, so factor this in to how much selling shares will cost you.
You can choose what level of involvement your broker has. The three types of broker service are:
Execution only. This is where you buy and sell shares without advice or guidance. You have full responsibility for the performance of your portfolio. This would only be recommended for someone who has good experience in share dealing.
Advisory. This is where you receive advice on which company shares are worth buying and selling, but the actual decisions are down to you.
Discretionary. This is a service you pay for, where you authorise the broker to take full responsibility for your portfolio. They’ll make the trades they believe to be in your best interests, and can do so without your authorisation.
It’s important to find the right type of broker for your needs. The level of support you choose will affect the price you pay.
Most brokers charge you for every certificate you sell, but how much depends on the value of your shares.
For example, if you sell shares worth £10,000 you may get charged 1% (£100) to sell them. But if you sell another £10,000 the charge may reduce to 0.5% (£50).
Some brokers also charge a fee to cover the administration costs of transferring your certified shares into another name. This is usually around £20.
Dealing in shares doesn’t come without risks. The value of your investments and the income you can get with them can fluctuate depending on economic factors in the market.
You could get back more than you’ve invested, or you could get back less than you’ve invested. You’re not always guaranteed to make money.
Yes, request a CREST transfer form from your broker, then complete and send it back to them with your certificates. This process is usually free.
No, you may need to pay a broker fee to hold your shares electronically, but it will be cheaper to trade them when you decide to sell.
If the company is still in existence you can ask them to confirm your shares are still valid. Once validated, you can sell your certificates.
No, only companies that are listed on stock exchanges, like the London Stock Exchange (LSE) or the Alternative Investment Market (AIM).
Our comparison tables include providers we have commercial arrangements with. The number of listings in our tables can vary depending on the terms of those arrangements, as well as other market developments. They are all from lenders regulated by the Financial Conduct Authority (FCA).
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You do not pay any extra and the deal you get is not affected.
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