Author Topic: ComputerShare Fees Suck // How do I move paper share certificates into my IRA?  (Read 45754 times)

TrulyStashin

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Perhaps someone here can advise me . . . In 1998, my parents gave me 2 shares of Verizon stock as a gift.  Interestingly, these shares were the descendants of Ma Bell shares given to them by my grandmother in 1964 as a wedding present (which she had inherited from her father who bought them when God was young).  When Ma Bell split up, my parents' shares split into three different companies one of which is Verizon.

Anyway, enough charming history . . . when they gave me the shares, they gave them by transferring old-fashioned paper stock certificates.  I have the certificates but somehow a company called ComputerShare (which generally manages Direct-Buy programs and DRIPS) receives the dividend reinvestments.  Over the years, I've plugged a little (very little) bit of money into it and now have something like 3.7 shares.   

The recent dividend yield was $5.00 and those bastards at ComputerShare took $3.00 for their administrative fee!!  This highway robbery has been going on for a long time and even though it isn't much money, I'm offended and over it.  It's past time that I fixed this.

How do I get ComputerShare out of the picture without selling my shares?  I can't move the shares into my Roth because you can only put cash into a Roth and I don't want to sell.  I have a traditional IRA.  Can I move the shares there?  Can I simply remove ComputerShare as custodian -- but then how would I reinvest dividends?

Thanks for your help!

beltim

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Your best bet would be to transfer the shares from ComputerShare to a taxable brokerage account.  I've done this myself, but there's always a fee to transfer shares, so you may want to check and see if it's cheaper to just sell and redeploy the cash yourself.

daverobev

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Not sure how ComputerShare US works, but it's likely to be Verizon charging the fee.

IMHO the best thing would be to actively DRIP - that is, send in a cheque every so often. If you do it for every dividend (every quarter?) it'll build up to a nice amount. Not sure about VZ, but some firms give a discount on shares purchased with the dividend cash, and some even do the same with the OCP cash (optional cash purchase - ie the money you send in).

I have a few set up here in Canada now - early days, but I like it. There are tax breaks. ComputerShare is actually nicer than Canadian Stock Transfer in terms of having PAD available for some things (pre-authorised debit, that is).

I have some Tim Horton's which DO charge fees actually, but not many do.

*Edit* and you *might* find they only charge that fee if you're inactive. Not sure.

beltim

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Here's the fee schedule for ComputerShare's Verizon plan (https://www-us.computershare.com/Investor/3x/Plans/PlansList.asp?state=eStateDisplayPlanSummary&planid=287&cc=US&lang=en&bhjs=1&fla=1&theme=cpu):

Initial Setup Fee   $0.00    
Cash Purchase Fee   $0.00    
Ongoing Automatic Investment Fee   $0.00    
Purchase Processing Fee (per share)   $0.03    
Dividend Reinvestment Fee   5% of amount reinvested ($1.00 min/$3.00 max)    
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

These fees don't seem to make sense with your post, though.  The dividend reinvestment fee is supposed to be 5%, with a $1 min and $3 max.  You say that you were charged $3, which means that you must have had a dividend greater than $3.00 / 0.05 = $60, which means you must have had $60 / 0.51 = 117 shares or more.  Verizon's current dividend is $0.51 per share per quarter.  This doesn't jive at all with you saying you had 3.7 shares.


seattlecyclone

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Verizon's current stock price is $47.50 at the end of today's trading. You say you have 3.7 shares, meaning your total investment is worth about $175.

ComputerShare has a list of their fees for their Verizon purchase program here. They do charge a fee for each dividend reinvestment (min $1/max $3). You say they took $3 of your $5 dividend, which is 60%. Highway robbery, I agree. They also charge $15 + 12 cents/share to sell the stock, so ComputerShare would take almost 10% of your investment if you just wanted to get your money back.

My recommendation would be to sell those shares and cut your losses. I generally avoid such small investments in individual stocks because the trading fees (or dividend reinvestment fees in your case) eat up such a large fraction of your earnings that you're unlikely to even keep up with inflation. It's much more efficient to make investments in no-fee index mutual funds (or ETFs if you can do it without a trading fee).

If you are set on keeping these shares for sentimental reasons, you may find you would do better by transferring them to a taxable brokerage account. You will likely pay a fee at one or both ends for making this transfer, which may be higher than the fee ComputerShare charges to simply sell your shares. You will likely be unable to transfer fractional shares, and automatic dividend reinvestment may also not be supported at your new brokerage account (especially if your dividends are not large enough to purchase a whole share). But on the positive side, brokerage accounts typically let you keep the full dividend amount without stealing 60% of it for the privilege of investing the remaining 40% into a very small fraction of an additional share of the same stock.

Another Reader

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Whatever the fees, it just does not make sense to have DRPs with fees if you are not investing substantial amounts into them periodically.  If you have a taxable account with a broker, you can walk those shares down to the local office or call and get instructions for depositing the paper shares by mail.  They can initiate the transfer from Computershare of the third share. 

It's best to have a round number of shares, as Computershare will sell partial shares and charge the sale fee when they make the transfer.  These accounts are a real pain in the neck when small dollar amounts are involved.  Another alternative is to donate the shares to your favorite charity and let them deal with cleaning up the mess.  Buy two more shares in your brokerage account and no one will be the wiser.

TrulyStashin

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Thanks everyone.  I was slightly off in my numbers -- my YTD dividend payout is $5.22 with YTD fees at $3.00.   My current dividend is $1.75 with fees of $1.00.  Fuckers.

I'm going to override sentiment and adhere to the principle behind the story.  I'll divest and put the payout into my Roth brokerage. 

TrulyStashin

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FYI for others in this boat......Be on the lookout for a special share buy-back offer.

I recently got a letter from Computershare/ Verizon with a share buy-back program for people who hold fewer than 100 shares.   

For the cost of $1.50 per share, I can sell my measly 3.469 shares by mailing in the form and the paper stock certificate.   The address given is a PO box and I am not comfortable mailing a stock certificate to a PO box so I just called and got a street address that I can mail to with a tracking number.

I'll mail it on Friday.  Minus the commission of approximately $5.25, I should net around $155.00 with payout sometime in February.  I'll put that in my Roth brokerage and buy some other stock with it.

Good news!  And so long Computershare!

sheepstache

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Glad you found a solution.

I'm late to the party but was going to suggest you could also just choose to receive the dividends as checks rather than reinvesting them.

For those saying there's a transfer fee, I'm wondering where you're getting the information? I haven't been able to find it. And it seems most brokerage firms that want business aren't charging to transfer assets in. They want to be the ones holding your assets, to the point that sometimes they'll cover any fees charged by the institution handing the shares over.

FYI here's a blog post about a guy transferring his Verizon shares from computershare to TD Ameritrade. He says (it's clearer in the comments) that Computershare didn't charge any transfer fee.
http://www.retirebeforedad.com/2014/05/27/transferring-stock-computershare-td-ameritrade/

mmadness

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Great thread. Also there are people out there willing to buy and collect shares direct from another person, so it might be good to post what you'd be interested in selling on these boards or the Stock Exchange board here:
http://dripinvesting.org/Boards/BoardMsgs.asp?BID=8

The customary thing to do is to ask for the last closing price + $10 as a courtesy fee (to pay for your time to get your transfer paperwork/certificate stamped at the bank and mailed off). This is nice because many people just need a share to start their investment and then can add to it later. Think of it as passing on seeds for someone else to plant.

Or if you'd rather sell with a discount broker, then you should be able to withdraw your shares in either certificate form or instruct the transfer agent to send the shares by electronic format to your broker. Keep in mind there may be fees on either end so it's best to check beforehand. Certificate issuance should generally be free but Computershare has started charging fees for issuing some certificates. Also some brokers charge for you to deposit shares via certificate or electronically.

If you're holding DRIPs direct with the transfer agent and there are fees on re-investment, sometimes you can choose to remain on the DRIP plan but just change it so you receive 100% dividends in cash (either direct deposit by check). If not, then you can request to terminate the DRIP for a particular holding, ensuring that you receive 100% dividends in cash, you just won't necessarily have the option to send in purchases to buy more stock (if the particular plan offers that). However, you can re-enroll in the DRIP plan at any time if you choose to.

I hold a few stocks direct with the transfer agent (Computershare, Wells Fargo Shareowner Online, American Stock Transfer) and depending on the fee schedule for each company (which is different), I either collect 100% of the dividend in direct deposit/check or do 100% reinvestment if there are no fees.
« Last Edit: February 02, 2015, 05:57:12 PM by mmadness »

daverobev

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Great thread. Also there are people out there willing to buy and collect shares direct from another person, so it might be good to post what you'd be interested in selling on these boards or the Stock Exchange board here:
http://dripinvesting.org/Boards/BoardMsgs.asp?BID=8

The customary thing to do is to ask for the last closing price + $10 as a courtesy fee (to pay for your time to get your transfer paperwork/certificate stamped at the bank and mailed off). This is nice because many people just need a share to start their investment and then can add to it later. Think of it as passing on seeds for someone else to plant.

Or if you'd rather sell with a discount broker, then you should be able to withdraw your shares in either certificate form or instruct the transfer agent to send the shares by electronic format to your broker. Keep in mind there may be fees on either end so it's best to check beforehand. Certificate issuance should generally be free but Computershare has started charging fees for issuing some certificates. Also some brokers charge for you to deposit shares via certificate or electronically.

If you're holding DRIPs direct with the transfer agent and there are fees on re-investment, sometimes you can choose to remain on the DRIP plan but just change it so you receive 100% dividends in cash (either direct deposit by check). If not, then you can request to terminate the DRIP for a particular holding, ensuring that you receive 100% dividends in cash, you just won't necessarily have the option to send in purchases to buy more stock (if the particular plan offers that). However, you can re-enroll in the DRIP plan at any time if you choose to.

I hold a few stocks direct with the transfer agent (Computershare, Wells Fargo Shareowner Online, American Stock Transfer) and depending on the fee schedule for each company (which is different), I either collect 100% of the dividend in direct deposit/check or do 100% reinvestment if there are no fees.

The $10 thing is mostly a Canadian thing, I think? Most US shares you seem to be able to start DRIPping directly... At least you can with a LOAD of US shares at Computershare.

In Canada the only ones you can start are Fortis, if you live in a couple of the Eastern provinces, and Tim Horton's which is of course now defunct.

I love my DRIPs even though they are completely contrary to indexing.

mmadness

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The $10 thing is mostly a Canadian thing, I think? Most US shares you seem to be able to start DRIPping directly... At least you can with a LOAD of US shares at Computershare.

In Canada the only ones you can start are Fortis, if you live in a couple of the Eastern provinces, and Tim Horton's which is of course now defunct.

I love my DRIPs even though they are completely contrary to indexing.

The $10 customary fee is more of a Share Exchange tradition. Many US shares allow you to buy directly, but they require high minimum buy-ins. By exchanging peer-to-peer it still allows a person to start with one share. Also, like the Canadian shares, many US companies can only be purchased from an existing shareholder, not direct from a transfer agent.

There are a number of companies in Canada that a traditional DRIP can be started in. The list is here:
http://www.dripprimer.ca/canadiandriplist

The companies highlighted in blue are the ones which are suitable for traditional DRIPping. As you said, only Fortis allows you to buy from them directly, but only if you live in Newfoundland/Labrador. Otherwise you will have to buy from an existing shareholder off Share Exchange.

daverobev

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Oh ok, I thought the US was mostly 'easy' now. Not that getting certs is 'hard' but it's more hassle to have to send an unknown person tens of dollars in the vague hope they know what they are doing :P

I *almost* started DFS and GE. Decided against, in the end... for now.

Currently doing BCE, TA (oops), PWT (only bought the starter thankfully, never got around to sending them any money!!), BNS, LB, ENB, FTS, EMA. So nice when prices go up 3% the day before an OCP..

Zx

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Dang I wanted to buy Exxon. I researched it and found that it involves fees. Then I came here on a google search and discovered Computershare charges these fees on every share. No. Just NO.

innkeeper77

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Dang I wanted to buy Exxon. I researched it and found that it involves fees. Then I came here on a google search and discovered Computershare charges these fees on every share. No. Just NO.

That is wrong... The fees everyone is talking about are Verizon fees. The XOM drip has no fees besides a $15 sale fee. $0 to do the automatic investment, $0 for dividend reinvestment. The fees are different for each company stock. (They do have additional fees for market orders, but that isn't what the automatic investment is)

Source: I have a small XOM drip plan, and just looked it up again.

Don't knock computer share as a whole based on the Verizon plan!
« Last Edit: February 09, 2016, 04:05:07 PM by innkeeper77 »

mrpercentage

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You could set it to pay out you dividends in cash. I don't think they charge for that. Some plans are great some are not. You have to read the fees. these plans are meant to build a large position over time not buy 3 shares and stop. They are generally much cheaper than a Trade account with low to no fees at all

modulus

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Reading this thread got me thinking about some Employee Stock Purchase Plan shares I have through my employer sitting at Computershare.  Reading into the "participant trading fee schedule", this is all that is listed: 
"Trades of 499 shares and under ($0.10 cents per share plus $15.00 flat fee)". 

The same line is repeated for higher share numbers, and nothing else.

Does this mean if down the road I wanted to transfer these shares to a Vanguard brokerage account, I would still have to pay that fee?  If not, it seems it would be cheaper to transfer to Vanguard. When I am ready to sell the shares, I just pay the flat $7 Vanguard fee.

Zx

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Dang I wanted to buy Exxon. I researched it and found that it involves fees. Then I came here on a google search and discovered Computershare charges these fees on every share. No. Just NO.

That is wrong... The fees everyone is talking about are Verizon fees. The XOM drip has no fees besides a $15 sale fee. $0 to do the automatic investment, $0 for dividend reinvestment. The fees are different for each company stock. (They do have additional fees for market orders, but that isn't what the automatic investment is)

Source: I have a small XOM drip plan, and just looked it up again.

Don't knock computer share as a whole based on the Verizon plan!

Is this through computershare? I looked on the prospectus and found fees associated with buying shares, not just the original account setup but every share you buy afterward. If I am incorrect in my assumption, I'm heading back to buy some XOM. Not bragging, just saying.

EDIT: I went back to computershare and looked at the fee schedule. Sure enough, you were correct in your assumption and I was not. I wonder what I was looking at before....never mind, though. I'm going to buy a small sliver of that company. I like dividends.

ANOTHER EDIT: What I was looking at was the fee for a market share order. When I looked that up on Google it said that is any buy or sell order.

Well, I'm buying into the stock, right? So that's a .12 fee on every share I buy. That's what I was seeing and not liking. Is this not part of the DRiP?
« Last Edit: February 14, 2016, 10:47:19 AM by dagiffy1 »

daverobev

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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

Market order is not drip. If you just buy in their regular batches you'll not pay. You will lose $15 + 12c/share when you sell. Market order is when you want to buy NOW.

Zx

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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

Market order is not drip. If you just buy in their regular batches you'll not pay. You will lose $15 + 12c/share when you sell. Market order is when you want to buy NOW.

Excellent. I just put my DRiP order in, original plus a monthly. Thanks for straightening me out on the market order thing.

GlobeTrttr

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Coming back to the original post, just sell the shares at Computershare, pay the fees, and re-buy them at your discount brokerage if you want to own those shares again. 

Computershare is an archaic way to own stock and makes it way too complicated and expensive for retail investing.

My case was like the OP's - shares bought as a DRIP plan by Grandparents and parents starting when I was a baby and let the compounding work its magic.  I had 50-odd certificated shares of Bank of America that I didn't want to sell quite yet (during the recovery, after the recession), so I transferred them from Computershare to my Fidelity taxable brokerage account.  Big mistake.  This involved multiple phone calls, printing, signing and mailing forms via post, etc etc.  But the biggest pain in the arse was recording the cost basis of those shares in my Fidelity account. 

My dad kept all the statements so this had to be done manually, for each and every transaction and dividend reinvestment, by looking through 30+ years of statements from C&S, NationsBank, and Bank of America. 

I am so glad to be done with Computershare.