People without sharebroking accounts should not expect to sell their shares quickly, says fund manager.

People who buy shares in Mighty River Power hoping to sell them quickly could face a delay of several weeks if they have never been to a broker before, an investment expert is warning.

Milford Asset Management fund manager Brian Gaynor said he expected the Mighty River float to attract a lot of people who had never bought shares before.

But he said those without sharebroking accounts should not expect to sell them quickly and some who bought just a small parcel might struggle to find a broker who wanted to take them on.

"It's not just a matter of walking in and saying I want to sell up today."


New share investors have to get a Common Shareholder Number (CSN) and a valid Faster Identification Number (FIN) before they can sell any shares as well as providing documentation such as their bank account, tax number and proof of residency.

Gaynor said new legislation governing the finance sector meant there were a lot more hoops people had to jump through to trade shares compared with the 1980s.

But brokers said the time-frame could be reduced if people prepared beforehand.

Forsyth Barr managing director Neil Paviour-Smith said that once the correct documentation was presented a new account could be set up within 24 to 48 hours.

"It shouldn't take two weeks if they have got all the paperwork together."

But he said it could get delayed if more information was needed and it took time to go back and forth to get answers from the new client.

Alternatively brokers could also use a special mechanism under the NZX rules to sell the shares if it was going to be a one-off sale, he said.

Paviour-Smith said that while there could be some people who chose to sell their shares soon after the float, one of the Government's objectives was to look at building individual savings and familiarising more people with investing in shares.


"One-off sales are not what they intend."

Paviour-Smith said those who were planning to sell their shares quickly should prepare ahead of the listing by setting up an account.

He said the ability to sell small parcels of shares would depend on the attitude of different broking firms.

"Some will be reasonably willing to open an account, some will have policies around who they accept."

Paviour-Smith said his firm did not have strict rules but left it up to its local offices to decide if the person was worth investing time in.

Craigs Investment Partners managing director Frank Aldridge said he was not expecting many people to sell their shares quickly.

"We anticipate it will be a bit like Contact Energy in which people tended to buy them and put them in the bottom drawer."

A yet to be announced bonus scheme would also encourage people to hold onto their shares, he said.

Aldridge said that if people with small parcels of shares wanted to sell them they would not be turned away even if the service was not commercially viable.

"We will try and accommodate them no matter what size. We take a long-term approach."

Infographic: Claudia Ruiz