Personal Crest Accounts
PERSONAL CREST MEMBERSHIP

What is Personal Crest Membership?

(An article published in the June 2015 edition of the ShareSoc Informer Newsletter)

What is Personal Crest Membership and why should I use it are questions I am often asked. This article aims to supply the answers to those questions.

Personal Crest Membership is one of the three ways in which you can hold shares as a retail client of a UK based stockbroker. The three ways are in a nominee account, as a paper share certificate and as a Personal Crest Member. Very briefly these are the disadvantages of the first two methods (more information is given on these pages of the ShareSoc web site: https://www.sharesoc.org/investor-academy/new-investors/choosing-a-broker/ and https://www.sharesoc.org/campaigns/shareholder-rights-campaign/ ):

Nominee accounts destroy the direct relationship that you have with the companies in which you have invested. They won’t know who you are, and they won’t recognise you as a shareholder because you are not on the share register of the company. Nominee accounts create potential legal problems as your stockbroker owns the shares you have purchased, not you. If they go bust you can have major difficulties recovering your assets.
Paper share certificates cause problems in meeting the 2 day settlement times which now apply, are relatively insecure, and may easily get lost. The EU has mandated that they must be phased out by 2025.

Almost all listed UK company securities are now recorded and trades “cleared” within the Crest system, operated by Euroclear and have been since 2002. This is of course a highly secure electronic system so paper share certificates held by retail clients have to be “dematerialised” into electronic form whenever they are traded. Brokers who operate nominee accounts have electronic accounts within the Crest system and they interact with the Crest system directly.

A Personal Crest Member has a Crest account also, but in that case they have a stockbroker who acts as “Sponsor” and submits the required instructions to the Crest system. This is to a large extent an administrative convenience as retail clients might have difficulty operating such accounts directly, particularly when complex corporate actions need executing. But it also assists with security.

As far as the client is concerned a Personal Crest Account looks very similar to a nominee account. In other words, your broker will provide an electronic system that shows your holdings, and provide trading facilities, and shows your current cash holdings ‐ a Personal Crest Member has a separate linked cash bank account to his Crest account to enable stock purchases to be paid for, and into which receipts from sales are paid. But there are two differences from nominee accounts, which are:

Your name appears on the share register of the company after you have purchased a stock, and therefore your ownership of the shares cannot be disputed. More explanation of the advantages of this are given below.
Any dividends on the stock are paid directly to you rather than to your stockbroker ‐ either via a cheque send to the address registered for you in Crest, or to your bank if you have recorded your bank details with the registrar. This is a major advantage because although stockbrokers used to pay significant interest on your personal cash holdings, now they generally do not. If it goes directly to you, then you can earn more interest on it.

The advantages of being on the share register of a company are:

The company in which you hold shares will send you all corporate action notices directly, notices of General Meetings and a proxy voting form. You do not need to get a “Letter of Authority” from your stockbroker to attend an AGM or any other general meeting ‐ indeed you can generally turn up at any such meeting and be recognised as a shareholder with voting rights as long as you can present some form of ID.
You do not need to rely on your stockbroker to vote your shares (which even if you instruct them to do so, often gets lost), nor follow any special procedures. You will be sent a proxy voting form directly from the company’s registrar which you can easily return in good time.
The company will send you a paper Annual Report, or an electronic version, or you can opt in to pick them up from their web site. But you will definitely know when it is available.
Being on the register means that you will receive communications about any special events such as takeover bids, rights issues, requisitioned resolutions, etc, directly from the company. You can also sign third party requisitions and have other rights that are not available if you are in a nominee account. Only certain rights can be passed on by a nominee operator.
You will also be able to receive any communications from third parties who wish to discuss the affairs of the company with shareholders. Note: this does not mean you will be deluged with junk mail. This used to somewhat of a problem before the “proper purpose” rule for access to share registers was introduced in 2006. Neither does it mean that your name and address being on the register is a security risk as it used to be with paper share certificates because the electronic Crest system is much more secure, only stockbrokers can enter transactions and they have a legal obligation to identify their clients (“KYC” checks). Having your name and address on a share register is no more risky than having it on the electoral roll or in the telephone directory.

In summary there are a number of advantages of Personal Crest Membership over the use of a Nominee Account, with no significant disadvantages. This writer would never wish to use a nominee account if he had any choice (unfortunately at present ISA and SIPP accounts need to be nominee ones). Note that sometimes cost is mentioned as a factor, but in reality some brokers do not charge extra for Personal Crest accounts, although some do make some additional small account charge which is not likely to be significant unless you have a very small portfolio. It does take a stockbroker a bit more work to open a Personal Crest account on your behalf, and it might add a delay of a week or two. For that and other reasons some brokers have been deterring the opening of new Personal Crest accounts, and many no longer offer them at all (the Wealth Management Association, WMA, have a web page that enables you to identify which brokers offer them). Charles Stanley Direct no longer seems to offer them and although Stocktrade do, they are being taken over by Alliance Trust Savings who do not so they might reconsider their support in due course. However Killik still offer them on advisory accounts. Otherwise you probably need to shop around to find a broker that will support Personal Crest accounts.

We know of the following brokers offering personal CREST accounts. If you are aware of any others, please let us know and we’ll gladly add them to our list:

Blankstone Sington

Charles Stanley (Gold service and possibly CS Direct if you are transferring a personal CREST account from another broker)

Killik & Co

Redmayne Bentley

Note that one big advantage of a Personal Crest account is that it is very simple to transfer any holdings in such an account to another Crest account.

Other minor points to bear in mind:

If you still have some paper share certificates it is simple for your stockbroker to dematerialise them into a holding within a Personal Crest account.
Shares in companies traded on foreign exchanges and “funds” (Unit Trusts, OEICs, ETFs) can be held within a Personal Crest account with your stockbroker like any other holding, but they are then effectively in a nominee. The Crest system only applies to companies who are part of and registered within the Crest system. UK listed investment trusts are of course included in Crest so that’s another good reason to use them rather than other collective funds.
It is important to emphasise that operating a Personal Crest account is almost identical to operating a nominee account on the same brokers electronic platform. They will look after the administration for you in the same way ‐ for example when taking up rights issues.

In summary Personal Crest accounts are an invaluable way to ensure your shares are held safely and that you will be recognised as a shareholder by the company. Don’t miss out on this great facility when looking to open a new stockbroking account.

But be careful. Some brokers when you ask about Crest accounts suggest that their nominee accounts (which is all some of them offer and talk about) are Crest accounts. They may be using Crest underneath but you will not have a Crest account! You need a Personal Crest account.

Group description:	Our group is interested in sustainable investing and our goal is to identify and evaluate businesses that will thrive through innovation and their transition to a ‘One Planet Economy’. By leveraging the skills of group members, we aim to deeply understand these businesses, particularly focusing on how they develop long-term valuable benefits for their customers. Each year, we plan to evaluate around seven businesses to identify opportunities where our valuation exceeds the market price. A successful outcome is defined as achieving a compound annual growth rate (CAGR), including dividends, of 10% over a decade.
Meeting Type/Venue:	Meetings are in-person in a pub near to Waterloo station in London.
Meeting Frequency/Timing:	Meetings are bi-monthly on a Monday from 10:45am to 4:30pm. Members are expected to also pay for their own lunch which secures the group free use of a private room in the pub. The cost is expected to be £35-40 per person, per meeting, in addition to your SIGnet membership fee.

Group description:	SIGnet Taunton is a new group with around 10 keen members at present, with a range of investment styles and experience. We welcome new members.
Meeting Type/Venue:	In person meetings at a golf club near to the centre of Taunton.
Meeting Frequency/Timing:	We meet on the first Monday of every month at a golf club near to the centre of Taunton, 11am until 3pm with a lunch break.

Group description:	An online group for those who are new to investing, or have only been investing for a few years. Including topics such as: – What is a share or a bond, why and how to buy them. – Comparing funds, unit trusts, Investment trusts and exchange traded funds. – Portfolio management and diversification. – ISAs, pensions, SIPPS and how to save tax. – How terms such as PE ratio and dividend yield are used to value a share. – How to use technical analysis or charting.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Monday of the month at 7:00pm.

Group description:	An online group for those who already have some experience in investing. Covering topics such as finding companies to invest in, financial statements and ratios, valuation / margin of safety, analysis of companies and investment trusts and exchange traded funds.
Meeting Type/Venue:	Online using Zoom.
Meeting Frequency/Timing:	Meetings are usually held on the last Wednesday of the month at 7:00pm.

Group description:	The Equity Income Group welcomes investors of all levels of experience, from beginners to advanced. The focus of meetings is on dividend paying Investment Trusts, though there is also discussion around individual shares.
Meeting Type/Venue:	Meetings are held online.
Meeting Frequency/Timing:	Meetings are held every 6 weeks on a weekday between 7 and 8:30pm.

Group description:	A welcoming group open to all types of investors. Typical meeting content is to have a deep dive presentation on a topic selected by the participants and a session on buy/ sell/ key lessons learnt last month.
Meeting Type/Venue:	In person at a friendly pub close to Piccadilly Circus
Meeting Frequency/Timing:	Monthly during the evening on the first Wednesday of the month.

Group description:	All levels of experience welcome. A typical meeting agenda includes: – Macro Environment – Trades: Members review existing positions and identify securities with promising TA entry patterns or setups and with suitable risk/reward. Any security, long, short, futures, options may be considered. The convener takes actual positions in trades and maintains his own detailed ledger, accurately measuring performance of individual securities and cumulative activity. Members are notified by e-mail prior to the entries or exits that are decided upon. Following each meeting an updated copy of the ledger is circulated together with the next meeting agenda. Members may wish to maintain similar ledgers of their own but there is no obligation to do so. – Technical Analysis: Techniques and systems used in trades. Members can request discussion of particular aspects of TA.
Meeting Type/Venue:	Online via Zoom
Meeting Frequency/Timing:	The first Tuesday of every month from 7 to 9pm

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Meeting Type/Venue:	We aim to meet on the last Tuesday of each month in a private room at a pub in Playhatch. Start time 7pm with members encouraged to meet up around 6pm for a bite to eat / drink before hand, if their diaries allow.
Meeting Frequency/Timing:	7pm on the last Tuesday of the month. Meetings likely to last about two hours but with informal ‘overspill’ before / after.

Group description:	Group focused on active investing, primarily in small / medium cap UK equities.
Meeting Type/Venue:	Regular Zoom meetings interspersed with occasional face to face meetings and social activities in the North West.
Meeting Frequency/Timing:	Monthly on Saturdays at 10am.