Initiating a one off share sale can seem like a daunting prospect. This is because one off share sales aren’t typically made by active investors who avidly follow the ups and downs of the stock market. More often they’re made by people who have little or no knowledge about shares – they may have even come into ownership by nothing more than chance. Perhaps the shares were inherited from a deceased estate. Or they may have become available as part of an Employee Share Scheme (ESS) or Initial Public Offering. Now that you have them, you want to sell them. So, what do you do next? Fortunately, this is the kind of situation that Sell My Shares loves to assist with. Specialising in one off share sales enables Sell My Shares to provide expert advice to “accidental investors” who are just looking for a simple and affordable transaction.
But in order for you to make an informed decision, it can help to understand a little more about one off share trades and the stock market in general. To this end, Sell My Shares have put together an informative guide to one off share sales. We’ll briefly cover some of the common terms that you may encounter, why companies sell shares in their business, how you can go about engaging the services of a stockbroker and why a one off share sale is such a great option. We’ll then talk you through the process, step-by-step, so you can see just how simple the whole procedure can be.
How Does the Stock Market Operate?
A stock market is a place where people can buy and sell shares in publicly-listed businesses. Each share is a small percentage of ownership. The more shares you own with a certain company, the greater your potential return on investment. All share transactions are completed electronically by stockbrokers on behalf of the actual shareholders. The largest stock exchange in Australia is the ASX, the Australian Securities Exchange, with more than 2,000 listed companies. Even one off share sales will need to be completed through a stock exchange with the assistance of a stockbroker.
Why Do Companies Sell Shares in Their Business?
A business will typically decide to list on the stock exchange when they are looking to expand the company. At this time, they will hold an Initial Public Offering, which allows investors to buy shares in the company. This kind of transaction is mutually beneficial. The company uses the money raised to invest in the future growth of the business, while the shareholders receive a small percentage of company profits.
How Do Shareholders Make Money?
Owning shares enables you to make money by earning dividends or by capital return.
- A dividend is a periodic payment made to shareholders (usually every 6 to 12 months). It represents a percentage of the profit that the business has made and the amount you receive will be in direct proportion to the number of shares you own. The more shares you hold, the higher the potential dividend.
- A capital return is the profit that you make when you decide to sell your shares. For example, you may have purchased 1,500 shares at an Initial Public Offering, paying $6 per share. The business does well, and the share price increases to $10 per share. You then decide to sell your shares, making you a total profit of $6,000 ($4 x 1,500).
Will I Make More Money from Dividends or Capital Returns?
This is a tricky question, as it will largely depend on the number of stocks held and the overall performance of the stock market. A dividend is a slow and steady trickle, offering small ongoing rewards while capital returns present you with an upfront cash payout. A one off share sale is an excellent way to cash in on an asset, particularly in the case of inherited shares or those that you may have received as part of an Employee Share Scheme. Rather than betting on how the company will perform in the coming years or trying to predict whether share prices will rise or fall, a one off share sale provides beginner investors with an opportunity to reap tangible and immediate benefits. Sell My Shares have been directly involved in the sale of over $300 million worth of shares since it was founded in 2013.
What Kind of Stockbroker Should I Use for One Off Share Sales?
Stockbrokers can be roughly divided into two basic categories: those that offer “full-service” and those that operate online:
- A full-service broker delivers all the bells and whistles – a fancy office, a scheduled appointment and the opportunity to ask in-depth questions about the stock market. This is great for active investors who are looking to establish a long-term relationship with their broker, but if you’re looking to execute a quick and simple one off share sale then this may not be the best option. Some full-service brokers will even frown on one off share sales because they don’t come with the promise of an ongoing working relationship. A full-service stockbroker will typically charge a higher fee and require a great deal more paperwork.
- An online broker is great for those seeking a simple, no-frills arrangement with their broker. You have shares to sell, the online broker will sell them for you. An online broker will cost significantly less but will also typically offer less. You may need to do a lot of your own research and may find it difficult to get answers to your questions. On the plus side, online brokers are generally happy to help with one off share sales.
In contrast, Sell My Shares offer the best of both worlds. A one off share sale can be completed online in just 4 easy steps – no need to book an appointment and fill out reams of paperwork. But if you have any questions throughout the process, the competent team at Sell My Shares are happy to take your call and provide you with the answers you need. Sell My Shares deliver a fast and affordable service that is ideally suited to one off share sales.
What Are the Benefits of One Off Share Sales?
Also referred to as a ‘one off trade’, a one off share sale provides shareholders with an opportunity to sell Issuer Sponsored shares without going through the rigmarole of setting up an active trading account. Issuer Sponsored shares are those that are held by the company that issued them, rather than by a stockbroker in a trading account. Traditionally, selling these sorts of shares involved a long and convoluted process that could take several weeks to execute. You’d set up an appointment, travel to the brokers’ office, send necessary documentation by post, wait for return documentation to arrive by post…and hope that nothing important gets lost along the way!
A one off share sale completed by Sell My Shares couldn’t be more different. You won’t have to wait weeks and you won’t have to set up an account. In fact, a one off share sale can be processed online in as little as 15 minutes.
What Information Will I Need Before Initiating A One Off Share Sale?
Before you get started with your one off share sale it’s useful to have a few key bits of information on hand. Doing so will ensure that the online process can be completed quickly, smoothly and with no interruptions. The two most important details you’ll need are:
- It’s essential that you have your Shareholder Reference Number (commonly referred to as your SRN) before a one off share sale can be initiated on your behalf. Typically between 8 and 12 digits long, your SRN will begin with the letter “I” and can most often be found on the correspondence you’ve received from the share registry that manages your shares (such as a dividend or shareholding statement). If you can’t find your SRN then there’s no need to panic! Sell My Shares has an Online SRN Search tool that you can use to look up your SRN.
- You’ll also need either a current driver’s licence or passport to complete the online form. Photo ID is required so that your identity can be verified online prior to the share sale proceeding. This step provides shareholders with peace of mind that only the certified owner can authorise the sale of the shares.
How Do I Initiate a One Off Share Sale?
Once you’ve decided to move ahead with a one off share sale you’ll likely be surprised by just how quick and easy the whole process is. In fact, there are only four steps in the entire process:
- Click on the ‘Sell Shares Now’ button on our website and then fill out the online form. This usually only takes about 5 minutes and just requires a few basic details, including your SRN, your bank details (for the account where you would like the proceeds of the sale to be deposited) and some other basic shareholder information. The form has been laid out very simply, but it also caters to slightly more complex one off share sales, such as those involving deceased estates, company holdings or joint shareholdings. Alternatively, you can call Sell My Shares directly and provide the information over the phone.
- Complete the online identity check, as prompted. This is a fast and efficient process which is verified by FrankieOne, a secure third-party system that utilises cutting edge technology. After you’ve submitted the online form, you’ll be directed to leave a simple voicemail message as the first step in your ID check. You’ll then be asked to enter the details for either your passport or your driver’s licence…and that’s it! There’s no need to get certified copies of documents and no risk of things going missing in the post.
- At this point, there’s nothing else for you to do. The team at Sell My Shares will go ahead with processing the sale, ensuring that you receive the very best market price.
- As soon as the funds are cleared by the Australian Securities Exchange, we deposit them directly into your bank account.
How Much Money Will I Make?
Sell My Shares will arrange for your shares to be sold at the current “market price”. As you’re likely aware, the price of shares will constantly move up or down in response to market conditions. Just like any consumer purchase, the price of the shares is driven by demand and availability. If a company is performing well and making an excellent profit, then more people will likely want to buy shares in the business (increasing demand and lowering availability). But if a company experiences a decline in sales then the demand for their shares may decrease. These factors all play a role in determining the market price for each individual share.
Sell My Shares are proud to offer a customised service which can help you obtain the very best possible price for your one off share sale. We do this by offering the choice of a market order or a limit order:
- A market order means that you will get the best possible price for your shares at the current market price. This means that your shares will be sold for the highest current bid price that an investor is willing to pay.
- A limit order allows you to specify what price you would like your shares to be sold for, giving you greater control over your final profits. Unlike a market order (where the transaction is completed instantaneously), a limit order waits for a buy order that corresponds to your sell price. Once a buyer has been found who is willing to meet your price, the sale is finalised.
How Much Does A One Off Share Sale Cost?
Brokerage fees in Australia are generally calculated as a percentage of the total transaction value, with a set minimum rate. The good news is, there are no up-front fees payable. Rather, all brokerage fees are deducted from the proceeds of your share sale, with the remaining balance deposited into your bank account.
Sell My Shares offer a very competitive rate for one off share sales, with the option of selecting from an express of standard service:
- Value One Off Trade Service: Sell My Shares charges a flat rate of $110 + GST per share parcel, for shares with a total value of less than $10,000. If the value of your share parcel exceeds $10,000 then the brokerage fee is charged at just 1% of the total sale price + GST. This is the most popular service that Sell My Shares provides, with all one off share sales being completed within 1-2 days of you completing the online form and ID verification process.
- Express One Off Trade Service: This express sale option is designed for shareholders who require same day service. If you finalise the share sale process by 3 pm AEST (Monday to Friday) then Sell My Shares will have the transaction completed by close of business on the very same day. The brokerage fee for this service is $150 + GST per share (for share parcels worth less than $10,000) or 1.5% of the total share value + GST for share sales over $10,000.
How Soon Will I Receive the Proceeds of My Share Sale?
The value of your one off share sale (minus the agreed-upon brokerage fee) will be deposited directly into your bank account on the 3rd business day after the share sale is finalised (the day of the sale is sometimes referred to as ‘Day 0’). So, if your shares are sold on a Tuesday, then you can expect the transfer to your bank account to be made by the third business day (Friday).
Why Can’t the Money Be Transferred on the Day of Sale?
Although your one off share sale is primarily a transaction between you (the seller) and the buyer, the entire exchange is processed through the ASX (with Sell My Shares acting as an intermediary on your behalf). The ASX functions as a clearing house to ensure that all parties fulfil their obligations relating to the sale of the shares. This protects both buyers and sellers, but it does create a small delay between when the money is transferred by the buyer and when it is received by the seller. As soon as the funds have been cleared by the ASX, Sell My Shares will transfer them directly into your bank account. This ensures you receive your money as fast as possible, with no lengthy delays while you wait for cheques to clear.
I’m Ready to Go Ahead with My One Off Share Sale…
What Should I Do Next?
Just click on the ‘Sell Shares Now’ button and you’ll be directed straight to the online form. Alternatively, if you want to speak to one of the experienced brokers at Sell My Shares then contact the office today on Ph: 1300 722 852.