Investing in stocks using share certificates is becoming less widely available with some services quitting the market in favour of other, cheaper systems.
There are two different ways in which you can hold shares today.
First, through a certificated share dealing service where you trade shares yourself and hold the certificates.
Alternatively, you can use a nominee service where the investments are held by a company on your behalf which means your shares are held electronically.
Find out more about the two different ways to hold shares.
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Holding certificated shares
While there can be higher costs associated with buying and selling, due to the added administration involved of paper dealing, many people still choose to deal this way.
Millions of people in Britain still hold physical share certificates, to a value of nearly £190 billion at the end of 2012, at the last count by the Office for National Statistics. This accounts for 10.7% of all shares owned in Britain.
Many people prefer to hold the physical shares because they know they have them in their hands and are more comfortable dealing this way instead of online.
Further, certain companies offer benefits for shareholders that are only available if you are the named shareholder on the register. You receive company voting rights, company reports and any other perks that companies give directly.
But some firms are turning their back on this type of business.
Could you be sitting on a fortune?
In April Barclays Stockbrokers stopped offering certificated share dealing and in 2014 Royal Bank of Scotland sold its stake in NatWest Stockbrokers which provided share dealing services to both RBS and NatWest customers.
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Where to turn
Finding a reputable certificated share provider is crucial to ensure your investment dealing is with someone you can trust.
It is important to research the associated charges so that you don’t pay over the odds. Charges will eat into your overall returns so keeping them low will benefit what you take as profit.
High street banks are notorious for over-charging loyal customers, so make sure you compare costs by doing some homework online. There are several providers that don’t charge an annual fee, for example. So don’t get stung there.
Find out the cost per trade, any minimum trade restrictions, administration fees, as well as accepted payment methods.
Read Annie Shaw's guide to common investment mistakes.
Services vary widely depending on which provider you go to, so think carefully about your requirements and weight up the costs involved to ensure you find the best share-dealing firm to suit your individual needs. Customer service will be paramount.
Saga Share Direct, provided by Equiniti Financial Services Limited, is a low cost share dealing service with no annual account management fees and flexible trading options. Some investment types may have their own fees. Aged 50 or over and would like more information?
Shares are high‐risk investments. Share prices and the income from them can fall as well as rise and you may not get back the full amount invested. Saga Share Direct does not offer advice. If you are unsure whether this service is suitable for you, please consult a financial adviser.
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