READERS' LIVES; Sent round the houses in search of an Abbey PEP

Homes for windfalls ... cutting commissions ... selling shares cheaply. Your financial queries answered

When Abbey National first floated I received 100 free shares that are now worth more than pounds 800. As I am now a higher-rate taxpayer I want to transfer them to a low-cost single-company PEP. I am considering a PEP run by Abbey National itself but judging by its response to me it does not seem to really want my business. Should I persevere?

BA, London

Abbey National deserves a public shaming. Let us run through your experience. You ring up a phone number for life insurance, pensions, PEPs and investments from an Abbey National advertisement in the phone book. It cannot help you on that number and gives you a second number. You ring the second number. No help here. You are told to go to your branch and see an adviser. It also gives you a third number to ring. You ring this number for five minutes. It is not answered.

You go back to the first number. This time you are given a fourth number to try. You ask the Abbey official for an assurance that this is the right number. You are given a fifth number. At last, you find you have the right number.

You are then sent an application form and an 18-page information booklet that still fails to give the relevant advice. To transfer your shares into the PEP you need in effect to sell them and then immediately buy them back within the PEP, a process referred to as bed-and-PEPping.

Your shares, when sold, might be worth pounds 800. You cannot be sure. But the minimum investment in the PEP is pounds 1,000. What precisely should you do?

In fact, you have to guess what your shares will be worth on the day they are actually sold. Then, with your application form, send in a cheque to top up your investment. In this case send a cheque for pounds 250. State you only want to invest pounds 1,000. You will get a refund of any money left over.

Abbey National has no defence for its inability to respond to your inquiry efficiently. It says it has now made sure that everyone who picks up the phone to the public has a list of all relevant phone numbers. And it says it will look again at possible deficiencies in its leaflet.

In fact, the Abbey National PEP is about the cheapest single-company PEP you will find for your Abbey National shares. Higher charges on other PEPs could outweigh the tax saving. Nevertheless, with the Abbey National PEP you might also be tempted to consider whether you might end up incurring further charges by way of extra phone calls to sort out any administrative problems with Abbey. Would you prefer to spare yourself the frustration of dealing with this company? Only you can decide.

IN a recent reply to a letter you suggested that consumers should try to negotiate a rebate of the commission an investment adviser gets. I approached several insurance companies to see whether I could get a rebate but with no luck. My wife and I have a number of investments and our adviser has earned pounds 4,200 in commission so far. Over the next six months we will have a further pounds 70,000 to pounds 80,000 to invest. Our adviser has suggested we go for investments similar to those we already have but we believe he has already been well-recompensed for his services. Any ideas?

JS, South Yorkshire.

Two suggestions. First, ask some fee-based advisers what their charges are likely to be. Fee-based advisers are not usually cost-effective if you have relatively small amounts of money to invest. But you have a substantial amount. A fee-based adviser should rebate all commission and then charge a fee which could be less than the commission. For a free list of fee- based advisers in your locality, ring 0117 976 9444.

Alternatively, bypass the advice process altogether if you are confident enough to choose your own investments. However, as you say, you won't usually get a rebate by going direct to the company that runs an investment. Instead, invest through a discount or "execution-only" investment broker (one that gives no advice), there are a number around offering discounts of, for example, up to 5 per cent on PEPs. Try Chelsea Financial Services (0171 351 6022); Garrison Investments (0114 250 0720); The PEP Shop (0115 982 5105); or Premier Fund Managers (0800 212577).

In the near future I will probably need to sell some shares to raise about pounds 3,000 of cash. What is the cheapest way of doing this?

MB, Leicestershire

There is now an abundance of relatively cheap share-dealing services. The cheapest are described as "execution-only" or "dealing-only" stockbrokers (also see above for discount investment brokers). With these, you will get no advice on the merits or otherwise of buying or selling a particular share.

The general principle is that the higher the value of the shares you buy or sell, the more you will be charged. But for low-value deals you will need to watch out for the minimum charge which, in some cases, can be quite high. Conversely, for a high-value deal you may want to use a service which sets a relatively low maximum charge.

Many banks and building societies now offer share dealing services. Alternatively try one of the following firms:

CaterDeal (01708 742288) has charges ranging from pounds 5 to pounds 15 on deals of up to pounds 500, rising in stages to between pounds 40 and pounds 50 on deals of pounds 10,001 to pounds 15,000.

Investorlink (0800 289600) charges pounds 15 for deals of up to pounds 500, pounds 17 on deals of pounds 501 to pounds 1,700, and 1 per cent on deals of pounds 1,701 to pounds 5,000, which gives a maximum charge of pounds 50 on a pounds 5,000 deal. This maximum applies to all deals of up to pounds 20,000.

The Share Centre (0800 800008) has a lower rate for FT-SE 100 and privatisation shares and a higher rate for other shares. For the former it is 1 per cent, minimum pounds 7.50 for selling (pounds 2.50 for buying). For the latter, it is 1.25 per cent, minimum pounds 11.25 for selling (again, pounds 2.50 for buying).

The Share Market (0161-237 9443) charges pounds 9 on deals of up to pounds 1,000 and 0.9 per cent over that amount, with a maximum of pounds 45 on deals of up to pounds 45,000.

ShareLink (0121-200 2242) charges 1.5 per cent on the first pounds 2,500 and 0.75 per cent on any amount over pounds 2,500. The minimum charge is pounds 20 (pounds 10 if you use a nominee account) and the maximum charge is pounds 50.

q Write to Steve Lodge, Independent on Sunday, 1 Canada Square, Canary Wharf, London E14 5DL, and include a telephone number. Do not enclose SAEs or any documents that you wish to be returned. We cannot give personal replies or guarantee to answer every letter we receive. We accept no legal responsibility for any advice given.