I am a shareholder in AIG, or British Airways. I received a prospectus from Computershare for the AIG offer of buying new shares for holders of original shares.
I have read the prospectus and decided on my course of action. Reading the prospectus it informs me that I should phone Computershare on the number it lists in the prospectus which I have done.
On getting through you have a choice and I picked the one for AIG, waited on hold for 20 minutes and eventually spoke to a lady.
I explained to her my choice of options and she informed me that I need to go online to register and do my business there.
Customer choice: I want to sell my shares over the phone because I don’t trust the internet (Stock image)
I informed her what the prospectus said, whereby she said she would not discuss this matter and she would terminate the call, which she did.
I find this a strange way for a company to do business. I am concerned as this attitude could prevent me from obtaining the monies I could receive from selling my allotment. As a pensioner this money would be beneficial to me.
I was wondering if you would look into this matter, as there must be a lot of pensioners like me who invested in British Airways and are entitled to this new offer, and like me would rather sell their options.
By the way I am not confident enough in this IT thing to do any monetary transactions on the internet as it is so unsafe these days and there are plenty others my age who feel the same.
Tanya Jefferies, of This is Money, replies: Many shareholders still prefer to trade over the telephone, and it is possible to do this though more expensive.
We asked Computershare to comment on your case and it appears it was keeping both communications and transactions during the AIG capital raising digital as far as possible, for reasons it outlines below.
The firm tells me that if you contact it direct about your customer service experience, it will investigate your complaint thoroughly.
If you still want to sell your AIG shares over the phone, we asked a stockbroker offering traditional services to explain the process and likely cost.
It sounds like you have paper share certificates, and the pros and cons of holding stocks this way and the newer ways of doing so are also explained below.
A spokesperson for Computershare replies: We’re always sorry to hear when a shareholder isn’t happy with our services.
Our contact centre staff members are currently working from home and, while we’ve managed to keep our services running throughout the pandemic, some callers have experienced longer wait times.
On top of this, as a capital raising under Spanish market requirements with a limited window of opportunity for UK shareholders to take part and make their election, this was a complex transaction, which resulted in high call volumes.
Nevertheless, whenever a shareholder lets us know directly that they are unhappy, our complaints team investigates thoroughly.
As a result of the pandemic we are currently working with our clients to communicate with their shareholders digitally whenever possible.
Shareholders wanting to take up the offer to buy or sell new shares as part of this transaction needed to do so via our website rather than use physical mail.
Mark Feely: Increasingly investors are converting their paper shares into digital format
This safeguarded everyone in the process, and meant that the offer could go ahead regardless of any local, pandemic-related restrictions that may have been put in place.
As public heath restrictions begin to lift, we will of course review the way in which we can provide services and discuss with our clients the best options.
Mark Feely, head of Charles Stanley Investment Choices, replies: Dealing in shares electronically is now the preferred method of trading shares for many investors with large volumes now being transacted via investment platforms which allow purchases and sales for a nominal fee.
However, there is still a large section of the investor community that prefer to trade via telephone and by speaking directly to a dealer or investment professional particularly where paper share certificates are held.
How do you sell your shares over the phone?
Since you don’t want to trade online, it sounds like you still hold paper certificates for your AIG shares.
Holding shares in paper form is the oldest method of doing so. Trading in this format is often expensive and slow and trading is not available online, but an investor will benefit from their name being held on the company’s register.
This will mean qualification for shareholder perks and a having a vote at shareholder meetings, and there is no restriction on which stockbroker is used to sell them although not all offer certified dealing.
Taking up options on paper held shares can be time consuming and will often require contact directly with registrars with whom the share is registered.
An increasing number of them will require online notification of acceptance or rejection of the offer.
If selling the shares held in paper form is the aim, this can be accomplished online, by phone or by post by taking the following steps:
I hold one single certificate for lots of Diageo shares
I only want to sell them slowly to avoid a big tax bill. How can I do this? Read more here.
1. Contact the stockbroker or dealing service you wish to use. This could be the registrar for your shares or a company through which a dealing account already exists for example.
2. Notify the dealer how many shares you wish to sell. It is worth noting that if multiple shares are held on one certificate that it is not necessary to sell all of them if capital gains tax is a concern.
3. A pre-filled CREST (Certificateless Registry for Electronic Share Transfer) transfer form will be issued for completion and return. This is a legal document required to transfer ownership to the purchaser of the shares.
4. Upon receipt the sale will be completed with the proceeds sent via cheque or BACS (Bankers’ Automated Clearing System) payment, normally within two to three weeks.
By way of example, Charles Stanley would charge a minimum of £75 to sell shares held in paper form.
Investors that hold CREST accounts are able to trade online and also retain the registration of the shares in their own name.
Any notification of a corporate action, such as a new issue of the shares, will be received directly with the investor communicating their intentions directly with the company.
However, due to the high overheads generated in running a CREST account with the consequence that a high admin fee is charged to the client, they are declining in popularity.
What are the benefits of holding digital shares?
Increasingly investors are converting their paper shares into digital format to simplify and reduce the time taken to administer them.
There is an initial cost in doing this. For example, at Charles Stanley the cost is £50 per transaction. Once completed the share is held in nominee account on behalf of the client.
Online valuations are generally available with charges for trading dependent upon the service that is offered. For example, where the service is a digital only platform, overheads are reduced with trading costs lower compared to a telephone-based service requiring human interaction.
Holding shares digitally reduces the administrative burden for the companies that hold the shares on the client’s behalf.
Interaction with the client is quick with the client placing an order online to buy or sell with the trade normally completed within a matter of seconds and the share being listed on the online account straight away.
Any corporate actions relating to individual shares, such as the offer to purchase additional shares at a discount during a fundraising exercise, will also be dealt with digitally.
Confirmation of the investor’s wishes would normally be accepted either via email/secure message or verbally.
The problems with nominee share ownership
Simon Lambert, of This is Money, adds: One thing investors may want to note is that while the overwhelming trend towards holding shares electronically through nominee accounts, as explained above, has made buying and selling cheaper, there are concerns it has eroded shareholder rights.
Holding shares through nominee accounts makes it harder – but not impossible – to vote on shareholder issues and attend AGMs, while your holding is also not direct and so creates potential extra issues if the broker you hold the shares through a nominee account with folds.
This was an issue with the collapse of broker Beaufort Securities, where for a while investors risked having their holdings above the £50,000 Financial Services Compensation Scheme limit (now £85,000) raided by the administrators. The case and issues around nominee share ownership are explained in more detail in this article about Beaufort.
There is pressure on the investment industry and regulators to come up with an improved form of electronic share ownership that could better replace old-style paper certificates.