Morven Whyte gets straight to the point
Morven Whyte is an investment manager at Redmayne Bentley stockbrokers.
We asked her to come into the Working Lunch studio to answer your questions in Ask the Expert.
As usual, click on one of the questions in blue below to skip straight to that answer, or scroll down the page to read them all.
PAT BUNTON'S ANSWERS
1. Where can I find a simple A-Z list of shares, clearly indicating the ones that can invested in through an ISA?
The straight answer is that you can't! But the majority of newspapers, The Mail, The Express, the Indy, Times, Telegraph will all have a business section, and columns with share prices. For the largest list it might be worth buying the Weekend issue of The Financial Times. If you buy the Financial Times, however, you will find that you can buy most listed shares, but not normally those under the column headed AIM.
2. Why can't you have AIM stocks in Shares ISAs?
The Inland Revenue set the rules, and they say that only shares which are officially listed on a recognised stock exchange qualify. Generally this excludes shares traded on the Alternative Investment Market (AIM), because AIM is not a recognised exchange. However, shares that are on AIM and are also officially listed on a another stock exchange that is a Recognised Stock Exchange, such as Australia, are qualifying investments for the ISA stocks and shares component.
3. I have savings with First Direct of <£50 K. Plus I have shares and ISA held directly via a nominee account in First Direct. Are the shares at risk if First Direct goes bust?
There are two things to consider here, firstly cash, and secondly stocks & shares. Cash is covered under the Deposit Compensation Scheme - a fund established by the government to protect customers of banks and other financial institutions in the UK. This scheme will pay up to £50000 per individual who holds an account with a banking group.
Meanwhile stocks and shares are covered under the Financial Services Compensation Scheme. No compensation can be sought when investment values decrease as a result of market trends or inflation. The maximum amount claimable under this scheme is £50,000. Note: An authorised firm must have satisfied the FSA that it is 'fit and proper' to conduct investment business. A list of authorised firms, known as the Central Register is maintained by the FSA.
4. So, if you have more than £50,000 invested in shares, is your money safe?
If your money is spread across a wide variety of investments then you will have certainly reduced your risk. The majority of authorised firms will have additional insurance in place to cover their clients in the event of fraud.
5. What is the easiest/cheapest way to sell shares which are not listed on the London Stock Exchange but are listed in New York and Hong Kong?
In terms of ease it is best if foreign listed shares are held electronically with a custodian or broker, rather holding physical share certificates. You will need to put your stock into electronic form before selling, and as such you will need to check what the broker will charge to hold and then trade your shares. The costs to trade foreign stocks tend to be higher, with a minimum charge of around £35 upwards depending on how and where the stock is traded.
6. How do you find a broker?
The Yellow Pages under Stockbrokers, or Google 'selling shares' on the Internet are good places to start! Alternatively your bank could assist with the sale of shares.
7. Is it possible to sell the shares through another broker (ie not the one holding the nominee account)?
Yes, but you will have to first arrange to transfer the shares electronically between nominee brokers. This does not involve buying and selling but the existing broker will probably make a charge for the transfer. An nominee account is an account where you hold shares electronically rather having a physical share certificate. The nominee company effectively holds them on your behalf.
8. What happens if the nominee account broker ceases to trade (e.g. goes into liquidation or is barred from trading by the FSA)?
The assets are ring fenced, so if the Firm went into liquidation or was barred, your assets are held separately and could be transferred to another broker of your choice or into your own name, in certificated form.
9. What is a dividend and what is an ex-dividend?
A dividend is a distribution of profits to shareholders. It is usually sent every six or three months, in the form of a cheque or bank credit. Shares can either be cum-dividend or ex-dividend. Cum dividend is that the future dividend is built into the current share price. Ex dividend is that the shares have stripped the dividend off the share price. Usually what you find is that the share price falls on the day that the company goes ex-dividend to reflect the fact that you will be receiving a cheque from the company, as their distribution of profits.
10. If I sell some shares between the ex-dividend date and register date; who gets the dividend?
As long as you hold the shares on the ex-dividend date, or after that date, you will be entitled to the dividend. If you sell the shares before the ex dividend date you will not be entitled to the dividend. The confusion comes when you look at the register date. The registrars will have a date when they will use all of the names on the shareholders register to send the dividend, but clearly if you have only just bought or sold the shares it may or may not be entitled to it. Your broker will then reclaim or claim the dividend on your behalf.
11. What is the latest time to purchase shares to receive a dividend? Also, what is the earliest time to sell, to receive a dividend?
You need to buy the shares before the 'ex dividend date'. This will tend to be a couple of weeks after the results have been announced.
12. I have 2000 shares in Laura Ashley through my First Direct Shares account. I have been told that there is a "perk" for owning these shares but have never been told about it. How do I find out about it - and how can I claim it?
Yes, some companies do offer shareholders perks however it is difficult to claim these perks if the shares are held electronically in a nominee account. The Investor's Chronicle magazine, or your broker might be able to give you a list of Shareholders Perks. Holding the shares in certificated form or in a Crest Sponsored Member Account would allow you to receive the 'Perk' directly.
13. My husband inherited some shares years ago. He's now over 80 years himself and would like to sell them but has no idea how. Who can he go to for help?
Any friendly broker ought to be able to help. Your husband will have inherited the shares at the date and value of his mother's death. As long as he isn't making gains in excess of £10,200 there will be no tax to pay on selling. A simple account opening, form signing and depositing of the share certificates will allow him to cash the shares in.
14. If I sell shares to take a profit can I buy back straight away without capital gains tax implications?
No, you will need to wait 30 calendar days. If you wish to establish a capital gain and create a new base cost. The only other way of doing it would be to sell the shares, and buy them straight back in an ISA. This is known as a Bed & ISA!
The views expressed are those of Morven Whyte not the BBC.