I am not a financial advisor, please do not use my advice as professional advice, etc. I just have my own experience that I am working off of. As someone who works for a financial institution and posts income for DRIPs on a daily basis, it's a total nightmare because the system is messed up when you include middle men. From my side, and dealing with this on a regular basis from an operational perspective, the easiest thing I can recommend for you to do if you want stocks to reinvest divs is to do it yourself. So get those cash dividends, and buy back in them yourself. When you sign up for the DRIPs, the custodian or brokerage firm on the account must go through a transfer agent (not sure who is the TA for Vanguard or Fidelity), and this is where it can potentially get very inefficient for the client since layers of account administration happen. I'm honestly not sure how much I can say, because it relates to my job directly, and I don't want to cross any lines, so I think I may stop there. I can clarify a bit regarding the whole share/fractional thing: Whenever a DRIP account moves, only whole shares can be moved because it gets funneled through DTC who cannot process fractionals. So if you decide you want to go from reinvesting to cash dividends, those fractionals get "left behind" in DRIP. Per your decision as the client, those fractionals can be sold and you would receive the proceeds, barring any fees or commissions (which sometimes do eat up the entire proceed). Or, those fractionals are forgotten, and go to the Island of Misfit Fractionals and I'm usually the only one who remains aware of them, time after time... because it messes with my Recon each quarter. Sometimes, if it's a big enough fractional, and no one sells it, and the subsequent dividends have big enough rates, it can get caught in a loop of reinvesting $0.01/0.0001 shares, or more as the fractional balance slowly rebuilds over time, to a point where it becomes 1 whole share and all of a sudden the client and admin on the account go "Cezilous, why did you fuck this up, it should be all gone since forever ago!".. Sigh. :D
I hope I helped, in some little way.. It's so convoluted, that typing this up, I realize on Monday morning when I go in, I need to sit with my manager and draw up a Venn Diagram or something.