Your Money: Windfall Special - So where's my certificate?

If you fail to get the paperwork right you could lose money. Tony Lyons spells out the dangers

The first rule of finance is to read the documents carefully - to make sure that you know what you are being offered. The fact that you are not being asked to pay for your windfall shares is no excuse for leaving the paperwork unread.

Among the next wave of conversions from mutual to plc status, savers and borrowers with Halifax Building Society and eligible policy-holders with the Norwich Union and Colonial insurance companies have received notice of their share handouts.

Make sure you have received the correct share allocation. Savers with the Halifax, for example, will be receiving 200 free shares for investments of up to pounds 1,000, plus one share for every pounds 50 above that. With nearly nine million receiving windfall shares, there are bound to be mistakes.

If John William Smith has two accounts with the society, one in his full name and one in the name of JW Smith, the company's computer systems might well think there were two different people - each of whom would be entitled to their own share handouts. Unfortunately for Mr Smith, it is against the rules for anyone to receive the basic allotment of 200 shares more than once - and in time the society will discover the error and ask for the extra shares to be returned.

Just as important as receiving the correct share handout is deciding how you want to hold or sell the shares. If you want full control over your windfalls - whether to sell or re-invest - you must make sure you ask for the share certificate, which is in effect your proof of ownership, by completing, signing and returning on time the relevant section of the paperwork.

The converting societies are not exactly making it easy for people to get their certificates, and are encouraging investors to leave the shares in one of their special shareholder accounts instead. But that may not be the best way to profit from your windfall, whatever your long-term intentions.

Halifax, which plans to demutualise in June, is to offer a nominee share account for its new shareholders. Those who use the service will not receive a share certificate. Instead the Halifax will look after their shares and arrange for dividends to be sent to them. The nominee account service is free for the first three years, and during that time shareholders can use the Halifax's cheap share-dealing service. They can sell up to 1,500 of Halifax shares for pounds 7.50, and any amount over 1,500 attracts a charge of 0.5 per cent.

The advantage of using the nominee share account is that there is no danger of losing your share certificate and you can use the cheap dealing service. The disadvantage is that you will be able to sell your shares only through the Halifax's postal dealing service. Unless you are committed to letting the converting society look after your shares, you should read the forms carefully and sign the correct part of the documentation so that it sends you the certificate.

The case of the recent Alliance & Leicester flotation shows how unwise it can be to let the transformed society sell on its investors' behalf in one of its share auctions to investing institutions. Just over a quarter of its investors had their shares sold at the average price of 533p in the auctions. If they had taken their share certificates and sold their windfall through a bank or stockbroker 10 days or so after the float, they would have received more than 620p. They would have got the extra from a few strokes of the pen and 10 minutes on the telephone.

Many fund managers are offering attractive personal equity plans, and if you want to put your windfall into one of those, you must ask for the share certificate.

Both the Halifax and Norwich Union are offering PEPs, but those are corporate single company plans; you can only invest in their shares, and there is a pounds 3,000 limit. If, however, you have some extra cash, you may prefer to put both cash and your free shares into a general PEP plan. That will provide a wider spread of investment, and there is a higher annual limit, which at the moment stands at pounds 6,000n

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
The surrealist comedian at the Q Awards in 2010
people
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Sport
Christiano Ronaldo enjoys his opening goal
champions leagueLiverpool 0 Real Madrid 3: Ronaldo and Benzema run Reds ragged to avenge thrashing from their last visit to Anfield
Arts and Entertainment
Awesome foursome: Sam Smith shows off his awards
music22-year-old confirms he is 2014’s breakout British music success
PROMOTED VIDEO
Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
Arts and Entertainment
Contestants during this summer's Celebrity Big Brother grand finale
tvBroadcaster attempts to change its image following sale to American media group
Extras
indybest
News
Wilko Johnson is currently on his farewell tour
people
Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidate on the verge of tears as they were ejected from the boardroom
News
Call me Superman: one of many unusual names chosen by Chinese students
newsChinese state TV offers advice for citizens picking a Western moniker
Voices
New look: Zellweger at Elle's Women in Hollywood awards on Monday
voicesRenée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity, says Amanda Hess
Arts and Entertainment
Julianne Moore and Ellen Page are starring together in civil rights drama Freeheld
film
Voices
'Irritatingly Disneyfied': fashion vlogger Zoella
voicesVicky Chandler: Zoella shows us that feminism can come in all forms
Life and Style
health
Arts and Entertainment
Pink Floyd on stage at Live 8 in 2005. From left to right: David Gilmour, Roger Waters, Nick Mason and Rick Wright
music New album The Endless River set to overtake boyband for most pre-ordered of all-time
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    IT Systems Business Analyst - Watford - £28k + bonus + benefits

    £24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

    Trainee Recruitment Consultant Birmingham

    £18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

    Trainee Recruitment Consultants

    £20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

    Day In a Page

    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

    A crime that reveals London's dark heart

    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
    Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

    Lost in translation: Western monikers

    Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
    Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

    Handy hacks that make life easier

    New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
    KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

    KidZania: It's a small world

    The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
    Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

    'Renée Zellweger's real crime was to age'

    The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
    Thousands of teenagers to visit battlefields of the First World War in new Government scheme

    Pupils to visit First World War battlefields

    A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
    The 10 best smartphone accessories

    Make the most of your mobile: 10 best smartphone accessories

    Try these add-ons for everything from secret charging to making sure you never lose your keys again
    Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

    Liverpool v Real Madrid

    Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
    West Indies tour of India: Hurricane set to sweep Windies into the shadows

    Hurricane set to sweep Windies into the shadows

    Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
    Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

    A new American serial killer?

    Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
    Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

    Sting to trap paedophiles may not carry weight in UK courts

    Computer image of ‘Sweetie’ represented entrapment, experts say
    Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

    Return to Fukushima – a land they will never call home again

    Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
    Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

    Wildlife Photographer of the Year

    Intimate image of resting lions claims top prize
    Online petitions: Sign here to change the world

    Want to change the world? Just sign here

    The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
    Ed Sheeran hits back after being labelled too boring to headline festivals

    'You need me, I don’t need you'

    Ed Sheeran hits back after being labelled too boring to headline festivals