‘How can I sell a parcel of shares without paying a broker’s fee?’

Feb 18, 2019
Share:
When it comes to selling a parcel of shares of this value, using a broker is almost certainly necessary.

Q. I have 469 APA shares that I wish to sell. I bought these shares many years ago, I think they started as Alinta. Today’s price is $9.49 per share. I receive letters from Link Market Services Limited, but I do not wish to pay a broker’s fee on their sale unless absolutely necessary. I also am very wary of selling them online.

A. Based on the share price you have provided, the total value of these shares is about $4,450, which is not an inconsiderable amount. When shareholders hold very small parcels, companies will sometimes offer to buy up the holdings with low or no brokerage.

This is because the costs of ‘servicing’ very small shareholdings is uneconomical. Because of the value of your holding, however, it would be very unlikely that the company would provide this option to you. The role of a stockbroker is to link a willing buyer with a willing seller.

Unless you can arrange to sell these shares privately, using on off-market-transfer, you will be unable to avoid using a broker. For this service, they will expect to be paid.

Transactions through a stockbroker with a shopfront and staff will have overheads to cover and typically will be the most expensive way to transact. The only way you can do it cheaply is online. If you bank with a major institution, you will probably find they have close links or own a stockbroking firm.

The Commonwealth Bank for, example, owns Commsec. It is fair to say that transacting this way through a recognised broker, perhaps linked to a bank, will be as safe as banking online with that institution, although there are no bank guarantees as such in the way that your funds held with a bank are guaranteed up to $250,000.

You should only use a broker which is registered in Australia as an Australian financial services licensee (AFSL). Any AFSL will provide you with a financial services guide (FSG) when you make contact. That is your sure sign that the business you are dealing with is regulated by the Australian Securities and Investments Commission and there are mandatory consumer protection mechanisms sitting behind them.

Never do business with any company that is not an AFSL. The sale of these shares online should probably cost no more than $50 and could be as low as $29.95.

If you have a question for Starts at 60’s money experts, email it to [email protected].

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.

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