Many people hold their shares in nominee accounts – for SIPPs and ISAs they have to. These are held in a number of places and are a convenience to prevent shuffling of papers or to speed up the processes of buying and selling. For instance, the dealing stockbroker may hold an account for an investor, who does not therefore have to wait for share certificates to arrive before being able to sell them, and does not have to store and find the necessary papers. Some brokers offer the service free as a way of reducing their own administration; some charge a flat fee or one based on the value of the shares; yet others charge per transaction; and some large companies have instituted their own systems.
Source: Becket Michael (2014), How the Stock Market Works: A Beginner’s Guide to Investment, Kogan Page; Fifth edition.
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