How to Give Shares to my Nephew?

[Doyle]

Hi just wanting some advice on how to go about giving some shares to my 1 year old nephew. He has no CSN can I get him one? and who do I contact to do an off market transfer?

Thanks in advance.

[Doyle]

I'm with asb securities. Is it possible to get a 1 year old a CSN I guess was part of the question?

[Blue Horseshoe]

Computershare transfer shares at no charge, they have a off market form on their website, but you need to obtain a csn number for him first.

[Doyle]

Yeah a nice Idea, I just thought it might be a bit more of a learning experience if he had an actual share price to follow? So your suggesting just register him with a brokerage firm at let them do the work?

[CJ]

I'm with asb securities. Is it possible to get a 1 year old a CSN I guess was part of the question?Dont forget an IRD number if he doesn't already have one.

Any reason why you have choose shares rather than a managed fund?
Are you expecting him to hold the same share for 18+ year or do you expect him (or you on his behalf) to review (say) annually to determine if it should be sold.
Is this a one off or do you plan to gift shares (say) annually to build up a larger portfolio.

[percy]

See what registry the shares are with, then ring them to do an off market transfer.They should be kind enough to send you the form,or ASB should be able to supply one for you.
Phone numbers for you.
Link [09] 375 5998
Computer share [09] 488 8777

[Doyle]

Dot forget an IRD number if he doesn't already have one.

Any reason why you have choose shares rather than a managed fund?
Are you expecting him to hold the same share for 18+ year or do you expect him (or you on his behalf) to review (say) annually to determine if it should be sold.
Is this a one off or do you plan to gift shares (say) annually to build up a larger portfolio.

As above I just think he will learn more if it is a share price he can follow. To be honest I was just planning on buying and holding a couple of companies with Divedend reinvestment plans, then letting him make the decisions when he is in his teens. Not exactly the most sound investment strategy, but again im not planning on giving him much so more about a learning experience.

[warthog]

Hi just wanting some advice on how to go about giving some shares to my 1 year old nephew. He has no CSN can I get him one? and who do I contact to do an off market transfer?

What an excellent idea; especially the involvement in decision-making as a teen.

Just contact the relevant registry (e.g. Computershare). They will tell you everything you need to know and most likely email you any forms you require.

[stoploss]

As above I just think he will learn more if it is a share price he can follow. To be honest I was just planning on buying and holding a couple of companies with Divedend reinvestment plans, then letting him make the decisions when he is in his teens. Not exactly the most sound investment strategy, but again im not planning on giving him much so more about a learning experience.

Hi agree with STC 100 % on this . I tried to invest $ 1000 a year for each of my daughters for their education fund . Just got complicated....invested in a fund now and it is way easier. The fund sends out an update and does say what shares are held so from an education point of view that works. As much as I back myself, this has been a way easier thing to do ....

[Doyle]

I like the idea - what shares do you give a one year old out of interest? Presumably you have quite a long term outlook given your motives for gifting to him so just wondering what shares you see as having a solid 15yr+ horizon or there abouts. By the way the off market transfer thing is just a simple bit of paperwork with link or computershare - IRD numbers for children are easy to get, not sure how you get the you get the FIN and CSN though...good luck.

To be honest I was planning on keeping it simple, so one of the power generators (probably MRP as I already have these) and then Ryman Healthcare or maybe one of the banks instead.

Thanks for the advice everyone, I'll contact the Registry. I hadn't thought about the IRD number so thanks for that.

[Blue Horseshoe]

I recommend buying him Rakon, that way he will have tax right-offs for may years to come.:D

[CJ]

As above I just think he will learn more if it is a share price he can follow. My dad had similar ideas in the 80's (probably tax driven though). I made and lost a fortune on Brieley shares - I still have about $200 GLL shares as evidence.

How many top 10 companies from 10 or 15 years ago are still there?

[stoploss]

My dad had similar ideas in the 80's (probably tax driven though). I made and lost a fortune on Brieley shares - I still have about $200 GLL shares as evidence.

How many top 10 companies from 10 or 15 years ago are still there?

Over GFC when Charlies ran into difficulties with their bankers I stopped out. Got the numbers wrong and was left with a small balance so transferred those to ONE of my daughters. when they were taken over the cheque went into her bank account. All I get now from her is "Dad I want a Mac Pro" ,"no too much money" , "thats not fair why can't I use my charlies money" ....no that's for your education. From the other daughter Dad why didn't I have any Charlies ? ..I've got boring telecom ....can't win .....

[macduffy]

Interesting replies to an interesting question!

I have often done off-market transfers but always involving existing CSNs. I had assumed that if a transferee didn't have a CSN, then the registry would issue one!

[QOH]

My dad had similar ideas in the 80's (probably tax driven though). I made and lost a fortune on Brieley shares - I still have about $200 GLL shares as evidence.

How many top 10 companies from 10 or 15 years ago are still there?
I had a similar idea, thought I'd buy shares for my young
grandaughter in GPG at least 15 years ago, had visions of a good education
fund for her. Can't remember how much money I put in, but probably approx $1,000.
After a share split and reinvesting all dividends,only payout we took was a compulsory
one a few years ago.

Grandaughter is about to turn 18, at current GPG price looks like she will be lucky if she gets about $400.

[Lizard]

I would see it as a bit of a gamble - partly because the shares can't be transacted easily once set-up in his name... so there is a good chance they will either be worthless or taken-over before he is old enough to learn anything from the exercise. Partly because he will probably never be particularly interested and may even lose track of their existence if he changes address.

From the education side, it would be interesting to hear what others do.

I have "gifted" shares to my nieces and nephews for NCEA passes and also invested their savings for them - being only a few hundred dollars. But we have worked purely on a system of trust and a spreadsheet and all actually stays in my name. I only allocate them shares from within my own portfolios and charge them 1% round fee to change investments. They get a print out every month of their holdings. I keep a paper-based "cash management" fund for float and divs.

I won't hold more than $3000 per person in this way - once they get to that, they have enough to invest in their own name - although none have so far. The one that has cashed up so far, spent the money (on a laptop for university).

On the downside, it only works if you are a bit of a paperwork pedant (and a good enough investor that they don't end up being put off investing for life or querying where all their money went!).

[macduffy]

I hope you're not "churning" their investments for the 1% fee, Lizard!

:D

But seriously, it sounds like a worthwhile approach. A couple of questions.

Do they have any input into choice of companies once they're old enough/interested enough?

I assume you diversify their portfolios, commensurately with the modest amounts involved?

Cheers

[Lizard]

I hope you're not "churning" their investments for the 1% fee, Lizard!

:D

But seriously, it sounds like a worthwhile approach. A couple of questions.

Do they have any input into choice of companies once they're old enough/interested enough?

I assume you diversify their portfolios, commensurately with the modest amounts involved?

Cheers

I would love them to have some choice in the investments - I try to engage them in some discussion of choices and degree of success varies a bit. I think I have perked their interest, but never enough to take precedence over the latest viral youtube video :D

I give them one share per $100 initially until they have 3-5 shares. After that, I tend to keep it at no more than 5, as it is too many for them to follow.

[iceman]

From the education side, it would be interesting to hear what others do.

I have "gifted" shares to my nieces and nephews for NCEA passes and also invested their savings for them - being only a few hundred dollars. But we have worked purely on a system of trust and a spreadsheet and all actually stays in my name. I only allocate them shares from within my own portfolios and charge them 1% round fee to change investments. They get a print out every month of their holdings. I keep a paper-based "cash management" fund for float and divs.
.

I have invested in shares on behalf of all 4 of our children and after considerable to-ing and fro-ing, I decided to do it exactly the way you are doing it Lizard. It seems much simpler as long as the Trust and agreement of all involved is there. It is also likely to avoid the shares just sitting there and possibly becoming worthless as some posters have pointed out here.

[Merc]

Recently I re-read a share book published in 2003 and last read some years ago. Lots of good advice that is still current but food for thought in the share examples that were used. Most of the heroes of the day haven't exactly lasted the distance.

Some years ago when I was opening bank accounts for the kids the teller warned me to take care. The bank had numerous examples of kids hitting their teens, cleaning out the account on short term stuff and angry parents appearing through the bank doors demanding answers. The answer was that as the accounts were in the kids' names they were fully entitled to do so. Some of the accounts had significant funds in them so very, very unhappy parents.

Perhaps a joint share account in both your and the child's name with handover at 21st?

[1leon]

You pay tax on the management fee you charge and the income on the "allocated" managed investments?!

[CJ]

You pay tax on the management fee you charge and the income on the "allocated" managed investments?!the shares are in his name so everything is made up and tracked on a spreadsheet. Unless there is any contract, they probably don't even have a legal right to the money.

[Anonymous]

Just a comment from the 'giftee' side. I have some cousins who were all gifted shares at a young age with the proceeds being transferred at age 18 or something. The person giving the shares was obviously picking what they thought were he best picks at the time. The problem was when the kids turned 18 there was some major differences in value. One kid made a ton and the others were essentially worthless. It did cause some jealously at the time...

If you are managing an investment for more than one child at a time I think it would pay to keep them invested in the same stocks.

[CJ]

Unless the kid helps with the pick, I would keep the shares even.

Alternatively, hold them as a joint fund with each kid having a proportionate interest.

[winner69]

Hope lizard doesn't do Ross management thing

No way - lizard too nice and honest for that

But what do your clients say when the fund goes down?

[Lizard]

Hope lizard doesn't do Ross management thing

No way - lizard too nice and honest for that

But what do your clients say when the fund goes down?

Yes, I agree it has the potential to become a micro-scale "Ross Asset Management" debacle, which is why I limit the funds, to no more than $3000 per person held this way, and allocate less than 5% of any one of my holdings in total. The intention is to inspire interest in investing, not to make them each a fortune at this stage.

At this stage, when the funds go down the clients tend to say "oh dear", but so far no one has actually lost money for any length of time. Touch wood.

I haven't tried to do the "same share portfolio" as it wouldn't work when they are investing different amounts at different times. I have considered setting up as a single fund and allocating units, but still prefer the personalised approach... the "shopper" was given HLG for a while, the apprentice builder was given CDI - since he was working on residential property in the vicinity of one of their developments, the budding architect had OIC at one stage etc.

I have some experience of looking after larger sums of money and the structures for that are a lot more formal. And yes, honesty and integrity is paramount - I can easily imagine how corrupting it could become for someone who had easy access to funds several times the value of their personal accounts.