Are you sitting on a forgotten hoard of share treasure?

ALTHOUGH investing is now primarily done online, many investors still have share certificates as a result of receiving shares in the demutualisation of building societies and other businesses in the 1990s and early 2000s.

Some of these holdings have long been forgotten. According to the Unclaimed Assets Register, part of credit rating agency Experian, shares and dividends worth £3 billion are still waiting to be reunited with their owners.

Mark Taylor is chief customer officer at Selftrade, part of share registrar Equiniti. He warns treasure hunters to manage their expectations over the value of any share certificate finds.

He says: ‘Some certificates will no longer be valid. The company may have been taken over or gone into liquidation. Or the share certificate may have been replaced by a new one following an event such as a share split or a company takeover.’

Equally there could be a valuable holding hiding in your paperwork that could help boost your wealth.

TURN DETECTIVE TO TRACK DOWN A FORTUNE

A QUICK call to the relevant share registrar should put you out of your misery – or reveal a windfall. Most share certificates show the name of the registrar which manages the shareholders of a stock market listed business.

There are three main players: Link Asset Services (formerly Capita), Computershare (formerly Lloyds TSB registrars) and Equiniti.

Companies do change their share registrar but it should be easy to track down the correct one. Failing that, Companies House, the national register of companies, will hold the contact details you need.

WHY PAPER SHARES ARE GOING OUT OF FASHION

PAPER shares are steadily going out of fashion and the pressure is on shareholders to join the digital age to cut costs. Taylor says: ‘Many countries have done away with them in a process referred to as dematerialisation – and replaced them with some form of electronic reference number or key.’

European Union regulation is prodding the UK towards a similar paper-free environment but there is no imminent date for implementation. Indeed, Brexit could put a spanner in the works.

Even without regulation, more investors are choosing to hold shares electronically. This means a stockbroker manages shares on behalf of shareholders in a so-called nominee account.

Taylor says: ‘Nominee accounts generally make it easier and more cost-effective to buy, sell and hold shares than paper certificates. Despite this many people are reluctant to give up their certificates as they are worried that using a nominee account diminishes the rela- tionship between shareholder and company.’

CONTACT A STOCKBROKER TO HELP YOU GO DIGITAL

IF YOU wish to keep the shareholding but ‘dematerialise’ into digital format then it will be necessary to open an account with a stockbroker. This can be done quickly online once you have picked your preferred broker.

The next step is to download two types of form from the broker’s website. The first is a ‘transfer-in’ form on which you list the share certificates you want to transfer. The second is a ‘ Crest transfer’ form which acts as the instruction to the market to convert the paper shares to electronic shares. You need one of these for each shareholding you want to dematerialise.

Post the forms to the stockbroker enclosing the paper shares. It will take a couple of days after receipt for them to appear in the new electronic nominee account.

HOW TO SELL PAPER SHARES WITHOUT SETTING UP AN ACCOUNT

DEMATERIALISING is one way of organising the sale of unearthed shares. Most brokers will make the transfer of share certificates into a nominee account free of charge but then charge normal selling prices. These might be £5 or £10 with a low-cost broker.

If that sounds like too much hassle, it is possible to sell paper-based shares through a stockbroker without setting up an account.

With broker The Share Centre you can complete a form from its website and post it with the certificates – at a cost of 1 per cent of the proceeds or a minimum £35.

Sell through Hargreaves Lansdown and the charge is 1 per cent – a minimum £20 – plus a £20 paper share charge.

EXPECT A CHARGE FOR REPLACING A LOST CERTIFICATE

REPLACING lost or stolen certificates requires a different course of action – and attracts extra charges. The first port of call is to contact the registrar, which will put a restriction on the certificate. This is to stop it being used fraudulently.

It will then issue a replacement for which you will have to pay at least £ 50 – possibly more. The amount depends on the number and value of the shares.

For high-value shareholdings, usually more than £10,000, expect to have to arrange a letter of indemnity signed by you and countersigned by your bank. If the certificate was stolen you will need to provide a crime reference number.

KEEP ALL YOUR FINANCIAL DETAILS UP TO DATE

KEVIN Firth, managing director of registrar Computershare, recommends that everyone commit some time to regularly update financial paperwork – especially those who have moved home recently.

This is especially important if, for example, regular dividend payments are sent by post. He says: ‘Over the course of a year hundreds of people get in touch with us to discuss forgotten shareholdings. We work hard alongside our client companies to contact customers who have stopped banking dividend payments, but it is difficult when we do not have up-to-date contact details.’

If you uncover dividend cheques that are out of date these can usually be reissued by the registrar – although there will be a charge deducted from the dividend’s value. It is sensible to have them paid into your bank account directly instead.