So, you need to sell some shares…now what? For the many first-time investors out there, this next step can seem a little overwhelming.
How do you go about selling your shares, without making the wrong decisions and without losing money? While you can theoretically set up a trading account and take on the process alone, this path often leads to disappointment and frustration for first-time investors. To ensure the sale process is smooth and ends with a great result, you’re better off seeking the help and expert advice of a professional full service broker. But how do you sell your shares without having to spend all of the profits on expensive stock brokerage fees?
At this stage, you have two options before you: selling shares online vs through a full service broker. Both have their own pros and cons, so it helps to consider what kind of shares you’re looking to sell and whether this is likely going to be a ‘one off’ share trade (i.e. you’re not planning to buy and sell any more shares in the near future).
Selling share through a full service broker
As the name suggests, a full service broker offers a full service package. You’ll typically meet with them at their office and spend considerable time discussing what your various options are. They’ll provide tailored recommendations, which, by law, must have a “reasonable basis”. The law also requires them to tell you if they have any financial interests in the recommendations that they’re making to you, to prevent them from acting for their own self-interest without your knowledge. This provides you with a certain level of assurance that the advice you’re receiving is factually-based and impartially given.
However (and not surprisingly), a full service broker charges a full service price – after all, they’re spending a lot of time and money to impress you and they still need to make a profit. Most full service brokers will charge a figure of around 2.5% for share sales up to $5,000 in value, although this percentage will generally decrease as the sale price increases. This means that while a full service broker can be useful for the buying and selling of large share portfolios, they can also be unnecessarily expensive for smaller ‘one off’ trades.
Selling shares online
If you’re looking for quick, simple and cost-effective, then selling shares online is the best way to go. Selling shares online means you don’t have to worry about the time and hassle associated with making appointments and travelling to a broker’s office. You simply go online, upload the necessary information and away you go. The online broker will take care of the rest of the paperwork, finalise the sale and then deposit the funds directly into your account. And because they have fewer overheads, selling shares online is measurably more affordable than using a full service broker, with costs averaging just 1% (although they can be as little as 0.2%).
And while selling shares online costs less, it doesn’t mean that you can’t still get real value from an online broker. An experienced and reputable online broker can help you with complicated share sales relating to deceased estates, family trusts and even those held by Self Managed Superannuation Funds (SMSF), providing the necessary expert advice you need to make good and profitable decisions.
To make sure you get the best possible service from your online broker, look for a company with an established reputation, excellent reviews and that you can still contact via phone in case you have any urgent questions you need to discuss.