I invested some £3,500 in shares on the advice of First Capital Securities, which called me and sent e-mails. I have proof of my investments in an IPO recommended by First Capital, but it is now unclear where that money is. I complained to the Financial Ombudsman Service, but it was unable to help me.

First Capital Securities, based in the Cayman Islands, is not regulated by the Financial Services Authority. The shares you thought you bought were in a UK-based company. But, because the broker is outside UK jurisdiction, the FSA and the Financial Ombudsman Service are powerless to help you.

Any firm “cold calling” you and giving a hard sell on shares should be avoided. The FSA says it is aware of experienced investors who have been pressurised into buying shares, which shows how clever these sales people are. The outcome is often (like yours) that the shares you buy turn out to be worthless. In other cases the broker makes it impossible for you to cash in your holdings, and puts heavy pressure on customers to buy more shares.

Any firm operating like this is almost certainly based abroad, and you will have no access to a complaints or compensation scheme.

If in doubt, phone the FSA (0845 606 1234) to see if a firm is authorised for business in the UK.

How can I sell without a broker?

I have some shares that were given to me when Halifax changed from a building society to a bank. I want to give away some of them to a family member. Do I have to go through a broker or is there some paperwork I can fill in?

You will need to complete a stock transfer form, a copy of which is available on the Lloyds TSB registrars website (www.shareview. co.uk). On the tax side, accountants at KPMG say that the transfer will be treated as a disposal at market value and therefore the gift may trigger a tax charge. However, you have an annual capital gains tax exemption of £8,200 in 2004-05 if you haven’t used it elsewhere.

On the inheritance tax side, this will be “a potentially exempt transfer”, and provided that you survive for seven years no IHT will be payable. As you are gifting the shares, there is no stamp duty to pay.

People who transfer shares to their children who are under 18 should be aware that any dividend paid is still taxable on you, the parent.

Tell me about corporate loan stock

As dividends in Peps and Isas are now taxable whereas interest, I believe, is not, it occurred to me that I might add some corporate loan stock to my portfolio. My problem is that I have been unable to find any internet site with information about stock and current prices. Can you help?

Alison Cashmore of online stockbrokers TD Waterhouse says: “You are correct in saying that dividends on equities are now taxable while interest on loan stock is not. For this reason both government (gilts) and corporate loan stock are an attractive option for Pep and Isa investors.

”Most corporate bonds qualify for inclusion in Peps and Isas providing they have at least five years remaining life at the time of purchase. Commission charges for trading bonds are the same as for equities.” As a guide, brokers charge from about £12.50 for online deals.

Cashmore suggests that you can find information on bonds including closing prices on the website www.bondscape.net. This site doesn’t allow you to deal in the bonds; you have to go through a broker for that. There’s a list of participating brokers on the bondscape site.

Why will nobody trade these shares?

In 1969 I inherited shares in a Rhodesian company called Northchart Investment which subsequently became Meikles Africa. I have received dividends from this company and they are quoted on the London market.

I hold 3,750 shares and now want to sell them, but despite contacting various brokers (including my own bank, NatWest) no-one is willing to act for me. I would be grateful if you could let me know why I can’t trade them and if any firm could handle the sale.

Emma Rees of Barclays Stockbrokers investigated your case. She outlines what has happened: “It looks as if Meikles Africa was listed on the London International Market until recently. This allows foreign companies wishing to increase liquidity in their shares to do so by having a dual listing, normally via a GDR (global depositary receipt). The London listing for Meikles was recently removed, which might explain why the brokers your reader contacted were not able to trade.”

She says Barclays Stockbrokers might be able to sell your shares but this type of deal would depend on getting a price from the broker’s agent in the country of origin. Rees has obtained a recent price for your shares (20p at the end of June) but as many shares of this type are infrequently traded it may not always be possible to get a dealing price.

To give an idea of cost, Barclays’ charge for dealing in non-International Retail Service stocks is 1.750 per cent for the first £10,000, then 1.125 per cent for the subsequent £10,000. There’s a minimum charge of £100 per deal (£45 for US stocks).

I’m worried by firm’s action with my cash

I have a modest portfolio that I am now seeking to organise to provide an income because I am about to retire. My independent adviser suggested using the services provided by an investment management firm.

I now learn the firm is moving my portfolio to a nominee company and that it could be assigned to another company at a moment’s notice. This concerns me as it appears all my eggs are being put in one basket. Also, it must be exposing my portfolio to additional risks that could include fraud and loss of my investment.

I have raised my concerns with both the firm and my financial adviser. Everyone reassures me but I am unwilling to progress as my fingers have been burned by Equitable Life, and it seems to me that the small investor is the one most at risk. Please comment on this matter.

The first point to make is that a nominee account is held separately from the funds belonging to your investment management firm. When shares are sold, they move out of the nominee account and the cash received is put into a separate “client money account”.

The reverse happens when shares are bought - the cash goes out and the shares come in. Your assets do not get mixed with the firm’s shares or money at any time.

Apcims, the trade body for private client investment managers and stockbrokers, points out that nominee accounts are very tightly regulated. Holding paper shares can result in delays in trading and there is concern they can be forged. The electronic record- keeping is considered safer, and it fits in with the culture of electronic share trading and settlement.

Apcims also says you should be aware that your investment managers can only act according to the agreement you have with them. There are different types of relationship - it seems likely from your letter that you have either a discretionary or an advisory agreement.

A discretionary agreement is when the client gives permission for the firm to act on his or her behalf, subject to criteria agreed in advance, such as the risk the individual is willing to take and whether he or she is seeking income or capital growth.

An advisory agreement gives the manager a similar remit, but the firm has to contact the client for permission before any transaction is carried out.

The advice in this column is specific to the facts surrounding the questions posed. Neither the FT nor the contributors accepts any liability for any direct or indirect loss arising from any reliance placed on the replies. Readers wishing to pursue matters raised in the column are advised to seek professional advice. Letters should be typewritten and kept as short as possible.