Over the last 20 years there have been plenty of share floats that have brought everyday Australians into the world of share ownership. One day, perhaps upon retirement, you may decide that you want to sell these shares to fund your lifestyle. This article reveals how to sell your shares without a broker.
Over the last 20 years there have been plenty of share floats that have brought everyday Australians into the world of share ownership. For example:
- Privatisation of Government assets like Commonwealth Bank, CSL and Telstra.
- Also large companies like AMP have demutualised and listed on the stock exchange and in the process issued shares to policy holders.
One day, perhaps upon retirement, you may decide that you want to sell these shares to fund your lifestyle. But, how do you sell your shares when you don’t have a broker?
(Technically you can’t directly trade on the Australian Stock Exchange – you have to use an authorised broker. By ‘without a broker’ I mean without the old-school method of talking to a human.)
Online share trading facilities
In our modern world the first idea that may spring to your mind is to establish an account with one of the many online share trading providers. Certainly that will work. But if you only want to conduct one or two trades it is a lot of effort.
Plus in setting up an account most online providers also establish a new, linked cash account for settling the trades. Again for one or two trades it is an extra account that’ll probably be more hassle than benefit.
Further, if you have some shares in your name, some in your partner’s name and even some in joint names you also may need a separate trading account for each ownership type.
One off trading facilities
If you just want to sell shares and not buy then a one off guest or visitor trade is what you need.
With a visitor trade you can sell the shares and receive a cheque posted to you, which you deposit into an existing account of your choice. No need to establish a new bank account.
Both of the big Australian online share brokers E*Trade and Commsec offer one off trading services. E*Trade refer to it as a Visitor Trade and CommSec refer to it as a One Off trade. You can download the forms from their website.
Yes it still involves a bit of paperwork and you still have to prove your identity by submitting certified copies of your ID. But it does avoid the extra paperwork of closing an account at the end.
TIP: If you already are a customer of CBA and have therefore proven your identity you can avoid that part of the process if you use the Commsec one off trade facility.
One off trades usually cost more than the standard per-trade fee from each broker. But it is still as low as $50 with E*Trade or $66 with Commsec (depending on size). See their websites for specific details to decide which is cheapest for your trade.
Market price only
One disadvantage of a one off visitor trade compared to establishing the online account is that your shares will be sold at the market price at the time your form is processed. You don’t get to dictate the sale price.
If you want to be able to time the sale of your shares and nominate the sale price you will need to establish the online account or go through the traditional human brokers (remember those?).
Issuer sponsored shares only
You can only use the one off trade facilities if your shares are what is known as “issuer sponsored” rather than “broker sponsored”.
The Commsec form describes how to tell the difference:
- Find your share holding statement.
- Look for the Shareholder Reference Number (SRN), which it is a 10 digit number.
- If your SRN starts with the letter “I” then your shares are issuer sponsored.
- If your SRN starts with the letter “X” then your shares are broker sponsored.
Broker sponsored shares
If your shares are already broker sponsored then just contact that broking company and ask them about the process and cost to sell the shares. You’ll be able to find the broker’s name and contact details on your share holding statement.
If you don’t fancy them or their fees then you can establish an account with one of the online share brokers and transfer your shares to them as your new nominated broker. Then you sell your shares using the normal online trading facility.