Why I No Longer DRIP With Computershare

By | November 17, 2019
DRIP investing

Recently, I had a Eureka moment. I realized that investing with Computershare no longer makes sense. With Computershare, I’m able to invest in companies directly. Additionally, Computershare has Dividend Reinvestment Plans (DRIPs) that allow me to re-invest dividends back into the same stock. Even more, I am able to invest a specific dollar amount into a stock regardless of the stock price. So, having the ability to invest in fractional shares is important to me. After careful consideration, I’ve decided that I no longer need to use Computershare to do DRIP investing. There are better brokers available for that purpose that offer me much more than Computershare does.

M1 Finance

One of the brokers that I think is better is M1 Finance. I won’t go into the specifics, but feel free to read my M1 Finance Review post that I did a while ago. Since that time, they’ve improved their platform. Still, M1 Finance allows me to invest with $0 fees.

Part of the reason why I’m leaving Computershare is that I am charged a fee whenever I decide to sell my stocks. Even if purchasing a DRIP stock is free, the sale is not. There’s no reason in this day and age that I should be paying to sell my stocks when there are so many other companies that offer $0 fees in that regard.

Charles Schwab

Charles Schwab is another brokerage firm I am seriously considering. Although I will transfer all my funds from Computershare into M1 Finance initially, I am seriously thinking about opening a Charles Schwab account. Recently, Charles Schwab announced that they are joining the ranks of those brokerages offering $0 fees for investing in stocks. Other companies have followed suit. But I’m keeping my options open and may very well choose Charles Schwab, Fidelity, or another company in addition to M1 Finance, if nothing else, to not have all my eggs in one basket, so to speak.

Charles Schwab, for example, is well-established, have tons of resources to help beginners, offers $0 fees for investing in stocks, and have brick-and-mortar stores available for customers. What more could one ask for?



Conclusion

I didn’t want this to be a long post. I’m just emphasizing I will begin the process to transfer all my funds from Computershare into M1 Finance. At some point in the near future (perhaps early next year), I will create a new brokerage account elsewhere (possibly Charles Schwab). This will allow me to diversify my portfolio holdings.

DRIP investing is still a great strategy. I just don’t think it makes sense anymore to do it at Computershare.

What do you think of this post? Let me know your thoughts by commenting below.

8 thoughts on “Why I No Longer DRIP With Computershare

    1. Dividend Portfolio Post author

      I’m not quite sure Duane, but, for what it’s worth, it seems like Computershare has a Canada option available.

      Reply
  1. Tom

    I too use M1 finance. I manage a IRA account there as well as a growth fund (FAANG stocks). I do wish that they invested dividends into the stocks that pay them…you can set it up so you cab manually make purchases but I just let it auto invest once it reaches $10. I also have an E*Trade account (formerly a Capital One Acct) which I love now that they have $0 trades. I also have a Robinhood Acct. which I use for purchasing non-dividend stocks as they don’t DRIP and you can only purchase whole shares. I like them because I can make trades before the money leaves my bank and the trades are almost immediate. Loving the free trade bandwagon `that most are following!!!

    Reply
    1. Dividend Portfolio Post author

      Exactly Tom. I’m all for it. The fact that they were able to get on the bandwagon so soon meant they always could have done it but chose not to. They simply wanted to squeeze every bit of profit from their customers. Shame. I understand it. It’s capitalism and what a business is supposed to do (make profit for their shareholders), but kind of sad when you think about it.

      At first, I didn’t like that about M1 Finance – not being able to re-invest dividends into the stocks that produced them… but I think the automatic rebalancing feature makes sense. I still don’t like not having the option to be able to do that, but at least the alternative approach that M1 Finance use is not a bad one.

      Reply
  2. JC

    I’m curious how the move to $0 commissions by just about every brokerage firm out there is going to eat into Computershare’s business. I honestly don’t see any real advantage for using them other than it might be more difficult to go through the sale process and that you can buy in $ amounts rather than share amounts. For investors probably the only thing that Computershare has going for it now is that it’s easier to set up the automatic purchases for the specific companies that you want, although I’m sure there’s options available out there with the bigger brokerages.
    JC recently posted…Net Worth Update – October 2019My Profile

    Reply
    1. Dividend Portfolio Post author

      I couldn’t agree more JC. I just don’t see any advantage going through Computershare.

      Reply
  3. desidividend

    when my company issued shares it was through computer share and i found it expensive to buy shares and moved all my funds from as soon they became vested.Now there are lot more options like robinhood or TD ameritrade

    Reply
    1. Dividend Portfolio Post author

      I do have a Robinhood account with a small account, but I don’t like the fact that I can’t do fractional shares, etc. They are not a bad platform though.

      Reply

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