Building Society windfall survey: More haste - less cash

Don't be in too much of a hurry to sell your free shares - with a little extra effort you could reap a richer reward

Selling your windfall building society shares is easy. Fill in the appropriate form, send it off, and a couple of days after you have seen the broad grins of the directors on television, go to the cash machine and, there you are: an extra pounds 1,000 or so in the bank.

The directors are grinning because they are expecting a pay rise - but you might not be so happy to discover that, had you held on to your shares for a couple of weeks, you could have sold them for pounds 100 more.

Almost three in 10 Alliance & Leicester members who received free shares last month opted to sell immediately through the in-house sales operation. The shares were sold through three auctions on the first day of trading, and investors were paid the average price realised over the three sales.

That worked out at 533p for their shares, netting a tidy pounds 1,332 profit. But the share price is now hovering around 585p - so a sale today would net around pounds 100 more. Even taking account of dealing charges, you would still be about pounds 80 better off.

The lesson is that if you want to be a smarter seller in the remaining conversions, it may be worth a little time and effort - say 20 minutes and a couple of phone calls at most.

You must ask for your share certificate when you complete and return the share allocation form. Halifax members need to do this before 26 May. The certificate should arrive before stockmarket trading starts.

Paul Williams, director of dealing services at NatWest Stockbrokers, says that it makes good sense to opt for the share certificate. "This will give them more flexibility and control but means they'll have to watch the share price and act quickly to dispose of their shares when the price is good."

There's no easy way to work out in advance when the share price will peak - but by delaying your sale you will be likely to make more money that if you sell on the first day of dealing.

Most of the high street banks and building societies will be able to sell your shares. At NatWest, for instance, 280 of their branches have instant share dealing services where you can see on a screen the price of the shares and sell there and then if the price is attractive.

The cost is pounds 20 and, as well as your share certificate, you'll need to provide proof of identity - such as a driving licence or passport - and details of which account you want the cash transferred to.

Selling by telephone is equally straightforward. A number of execution- only brokers - those who simply follow your instructions to sell or buy shares, without any kind of advice - geared up to handle windfall share sales.

CaterDeal, formerly CityDeal, wants a one-off registration fee of pounds 17.50, plus dealing charges: pounds 10 up to pounds 1,000 and pounds 17.50 up to pounds 2,000. ShareLink, the largest of the telephone-based brokers, charges a minimum of pounds 20 plus 1.5 per cent on the first pounds 3,000. The charges are deducted from the proceeds of sale.

In all cases you will need to have the share certificate to hand when you make the call.

One point to watch with telephone deals: the price quoted by the broker on the telephone is the price as you speak - but that may not be the price at the time the deal is done.

Which ever way you sell there's a simple way to check that the market is moving in your favour: the Independent Index. Find your share on the Independent's market report and shares page - it will be listed near the top of the page under the heading Banks, Retail. (Norwich Union, of course, will appear under Insurance.)

The figures to the left of the name are the highest and lowest prices at which the shares have sold so far, and the figure immediately to the right is the closing price from the previous day, followed by the amount by which it changed on the day.

In the last column is the index code: for example 5600 for Alliance and Leicester. Make a note of this number, it is the key to discovering how the price is moving today. Then dial 0891-123- 355-00 (calls cost 50p per minute; call charges include VAT).

After a welcome message you will be asked to enter the index code of the share concerned, and a digital voice will then tell you the current price and the rise or fall on the day so far.

For a free copy of the NatWest Windfall Share Guide, which includes prospects for the demutualising building societies, call 0800 200400.