The majority of shareholders have yet to switch to modern technology when it comes to their shareholdings, according to research from Barclays Stockbrokers, which claims most choose to keep paper share certificates rather than electronic records. The findings challenge the view that holders of certificates are inactive investors, either having inherited their holdings or having received them after a long-forgotten demutualisation.

Holding certificates is the main alternative to keeping your shares in electronic format via an internet broking account. And while settlement takes 10 days (T+10) as opposed to three (T+3) with an online account Barclays’ findings indicate security is one of main overarching reasons investors opt for paper.

After polling 1,900 people the broker found that one in five respondents held share certificates, of which 55% of these liked the physical security they provide. And it would not appear certificate holders keep their shares in a draw gathering dust, with 31% of respondents saying they used the internet daily to track their investments.

The findings from Barclays come as a large section of the stockbroking community is working on proposals to scrap share certificates. A working group of stockbrokers and companies called the Dematerialisation Reference Group is drawing up plans to replace certificates with electronic records. Under this system, which has the support of brokers including TD Waterhouse and the large company registrars, you’d get the associated shortened three-day settlement times of a regular internet account but without the drawback of losing their name of the register. All share certificates would have to go to make it cost effective.

Having your name on the register ensures your right to receive information from the company and associated voting rights – this can only currently be achieved by having your shares in certificated form as internet accounts today are based on nominee accounts that effectively sever the line of communication between company and investor.