Author Topic: Computershare and XOM Stock  (Read 5692 times)

WillPen

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Computershare and XOM Stock
« on: April 23, 2014, 08:33:35 AM »
My grandmother was a pretty savvy lady when it came to investments. When I was in 6th grade she purchased some shares of Exxon-Mobil in my name through Computershare. This was probably the early 90's. Fast forward 20 years and the stock has split, gone up in price, and paid dividends. In the grand scheme of things I probably don't own much, but it's a respectable number of shares.

I didn't pay the account a lick of attention until the past year or two when I became financially aware and started handling my own money. Now -- I know I need to go read some plans and talk to Computershare, but does anyone out there have experience with them?

Most of our money is in index funds that are efficiently allocated. I have a few individual stock holdings through a Fidelity brokerage account, and this odd-ball account with Computershare. I do appreciate that I can automatically reinvest dividends (like a mutual fund) but then I started wondering what kind of outrageous fees I might end up getting socked with. I'm wondering if I'm better off rolling the shares over to Fidelity or just putting that money into one of our Vangaurd VTSMX holdings.

Any suggestions or input are appreciated! The more I have to think about, the better.




Another Reader

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Re: Computershare and XOM Stock
« Reply #1 on: April 23, 2014, 09:18:45 AM »
Computershare is fairly easy to deal with.  They are the administrator for numerous dividend reinvestment and direct stock purchase plans.  Years ago, these low fee plans were the least expensive way for an individual to buy stock.  The company, not Computershare, sets the fees.  You can look up the fees for XOM on the Computershare website.

You can keep the stock in Computershare, have them sell the shares for their fee, or you can transfer the shares to Fidelity.  Transferring the shares is not a sale.  If you transfer the shares, there will probably be a transfer fee.  Any partial share will be cashed out.  Fidelity will also reinvest the dividends and they will do it at no charge.  You do need to track the basis, which is going to be a big PITA because you probably don't have the records.

I assume the account is in your name now.  If not, that will have to be cleaned up first.

I still own some XOM shares.  They pay a fairly low dividend for the industry, but I'm not inclined to sell and pay capital gains tax on the appreciation.  Like you, I have been ignoring it for years and I will probably let the heirs figure out what to do with it.

BuzzardsBay

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Re: Computershare and XOM Stock
« Reply #2 on: April 23, 2014, 10:40:07 AM »
I participate in ExxonMobil's direct stock purchase and dividend reinvestment plan through Computershare.  If you want to continue being invested in XOM, I would just leave the account alone.  If you want to take the money and put it into a mutual fund, the easiest thing to do is just sell all the shares and close the account.   I know you'll have to figure out your cost basis.  But at least you'll only have to do it once.  Then take the money and send it to your mutual fund company.  If you leave the account alone, later on you can set it up so the quarterly dividend payments are sent to you instead of being re-invested in more shares.

I actually have about 6 direct stock purchase accounts and have been adding to them over the last 15 years or so.  The idea being that once I retire I will get the dividend payments and use them to supplement my income.  Of course, that was before I learned about this website.  I'm still leaving the accounts there though.  I like having them as a separate little nest egg.  And the plan is to leave each one to a different charity or relative once I'm gone.

BuzzardsBay

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Re: Computershare and XOM Stock
« Reply #3 on: April 23, 2014, 12:38:43 PM »
And these are the plan fees:

Initial Setup Fee $0.00   
Cash Purchase Fee $0.00   
Ongoing Automatic Investment Fee $0.00   
Purchase Processing Fee (per share) $0.00   
Dividend Reinvestment Fee Company Paid   
Batch Sale Fee $15.00   
Batch Sale Processing Fee (per share) $0.12   
Batch Maximum Sales Fee N/A   
Market Order Sale Fee $25.00   
Market Order Processing Fee (per share) $0.12   
Market Order Maximum Sales Fee N/A

jasman18

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Re: Computershare and XOM Stock
« Reply #4 on: April 23, 2014, 12:53:06 PM »
Those are REALLY low fees.
You only pay when you sell. purchasing and having dividends reinvested does not cost much at all.
This is a really good plan to hold onto for LONG term and continue to put $25-$50 per month in and forget about.

This is of course to supplement your main index investing portfolio.

WillPen

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Re: Computershare and XOM Stock
« Reply #5 on: April 23, 2014, 03:51:34 PM »
Thanks for the input, everyone.

I have recently started viewing this as a supplement to my primary retirement accounts. I knew it was a way to purchase stock directly from the company, but it's good to know it's not a complete and utter rip off. Since I moved the plan over to my name I have been trying to contribute a little each year to help it grow. Now I feel a little easier about continuing to do so.


skyrefuge

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Re: Computershare and XOM Stock
« Reply #6 on: April 23, 2014, 04:15:12 PM »
Since I moved the plan over to my name I have been trying to contribute a little each year to help it grow. Now I feel a little easier about continuing to do so.

Seems kind of inefficient and pointless. XOM is the 2nd-largest component of the S&P 500, so when you buy index funds, you're also acquiring more XOM. Maybe even more than you are via your ComputerShare contributions. What's the point of adding to it in two different places? (especially since it sounds like you're overweighting XOM in your portfolio because of a pretty random reason, and not because you actually have thought through a rationale for doing so). I guess I could understand hanging on to what you have, just because the effort/cost of moving it is higher than 0, but why keep adding to it?

WillPen

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Re: Computershare and XOM Stock
« Reply #7 on: April 23, 2014, 07:50:42 PM »
@skyrfuge -- I have thought about that, and that was one reason I asked the forum. It is duplicative, since we already do own XOM through our index funds. I'll probably just keep it for sentimental value for now. I might change my mind once I learn how the "beneficiary" structure works for Computershare accounts.. I have no idea, I haven't researched it yet.