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  1. #16
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    Quote Originally Posted by Snoopy View Post
    Because the shareholders are the owners, and the owners might want a choice as to which bank they want their dividend cheque deposited into.



    You can certainly do the above in New Zealand. However AFAIK all brokers will charge you an ongoing portfolio management fee to do it, albeit at a reduced rate to what they would charge if they were actually doing the managing.

    SNOOPY
    No one in this day of age holds shares in 'street form'. They're held by some broker and therefore, it seems sensible the place of holding also manages the disbursements (incoming our outgoing). What other logic is there, other than to want it cleared in a different bank account? Since 'direct credit' is the preferred way of transferring $ in NZ, perhaps the shareholder should go back and change the way dividends are sent out ; and have it deposited in a different bank. I mean how difficult can this be to arrange?

    For NZ brokers, their free structure is the key reason why I refuse to have any such account in NZ (and i'm speaking from a Jack Bogle point of view in terms of long term growth from compound returns) . Can you blame me coming from a N. American model where commission trades are going to zero and no annual account fees?

    Any person asking a NZ broker to manage their account is simply a fool.. they might as well hand them out free $ for sub par performance (for which the brokers are only selling to clients "THE CHANCE" that they would perform better than the market index).

  2. #17
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    Quote Originally Posted by SBQ View Post
    No one in this day of age holds shares in 'street form'. They're held by some broker and therefore, it seems sensible the place of holding also manages the disbursements (incoming our outgoing).
    I don't know what you mean by 'street form'. All the correspondence on my shares come to my 'street address'. My NZ broker holds my CSN number and my FIN (password) number. So I can trade my shares just by ringing them without quoting my FIN number each time. Because my broker has my codes they can electronically check my share balances too. But I am in no way tied to my particular broker.

    I can go to another broker down the road and set up the same arrangement. Brokers do not 'hold the shares' in NZ, unless I ask for their managed portfolio service.

    By contrast the USA based shares I hold are on the books of Computershare USA, who are technically a share register, not a broker. Yet unlike in NZ, it seems I can sell my shares via Computershare USA without the need to go through 'a broker'. Yet Computershare USA will charge me a fee to do this. So I guess Computershare USA is a broker ???!??? I have never sold any of my USA based shares. So not sure in practice how this would work. I think I just have to fill in a paper request on a form printed by Computershare USA and send it off!

    Quote Originally Posted by SBQ View Post
    What other logic is there, other than to want it cleared in a different bank account? Since 'direct credit' is the preferred way of transferring $ in NZ, perhaps the shareholder should go back and change the way dividends are sent out ; and have it deposited in a different bank. I mean how difficult can this be to arrange?
    I suppose you could change the bank account you wanted to pay your dividend payment to electronically. But in my case I didn't want the change to be permanent. Sometimes I would put my dividend cheque straight into my Visa account for example. But if I didn't want to do that I would put it into another bank account. Having a cheque means you can be flexible with your payments without having to change your regular payment details each time.

    SNOOPY
    Last edited by Snoopy; 06-12-2019 at 07:36 AM.
    To be free or not to be free. That is the cash-flow question....

  3. #18
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    Quote Originally Posted by Snoopy View Post
    I don't know what you mean by 'street form'. All the correspondence on my shares come to my 'street address'. My NZ broker holds my CSN number and my FIN (password) number. So I can trade my shares just by ringing them without quoting my FIN number each time. Because my broker has my codes they can electronically check my share balances too. But I am in no way tied to my particular broker.

    I can go to another broker down the road and set up the same arrangement. Brokers do not 'hold the shares' in NZ, unless I ask for their managed portfolio service.

    By contrast the USA based shares I hold are on the books of Computershare USA, who are technically a share register, not a broker. Yet unlike in NZ, it seems I can sell my shares via Computershare USA without the need to go through 'a broker'. Yet Computershare USA will charge me a fee to do this. So I guess Computershare USA is a broker ???!??? I have never sold any of my USA based shares. So not sure in practice how this would work. I think I just have to fill in a paper request on a form printed by Computershare USA and send it off!



    I suppose you could change the bank account you wanted to pay your dividend payment to electronically. But in my case I didn't want the change to be permanent. Sometimes I would put my dividend cheque straight into my Visa account for example. But if I didn't want to do that I would put it into another bank account. Having a cheque means you can be flexible with your payments without having to change your regular payment details each time.

    SNOOPY
    I want to clarify a mistypo. Majority of brokers hold the shares in 'street form' ; it should not be what I posted before as 'not in street form'. Following link is for clarification and reasons why it's preferable to hold the shares in street form and none other like we see in NZ:

    https://www.finra.org/investors/insi...g-street-names

    Sounds like your example in NZ with your broker conducting the trade is the shares are held under "direct registration" and the company holds the record for it's shareholders. This is different to holding in street form where the broker holds the record and the company only has a registration of so and so broker has this many shareholders on the company.

    Of course the biggest drawback of NOT holding shares in street form is the lack of timeliness of the trade. Say if you choose a different broker to sell your shares, the process doing so (setup account and registration) takes time. Your CompuShare is acting as the registrar of the shares and most likely chooses their 'own' broker in contract to conduct the trade. However, again it's timely to fill out forms and get that information to the broker in time and could take days or a week to execute the trade; worse all, they may not even have 'acounts balances' for their clients - meaning they don't accept dividends ; they're just basically like a real estate agent that conducts the trade by charging a commission but not actually treating their clients like a bank account. Also the verification process is the problem causing delay vs direct online access would avoid such problems. I mean whether a NZ online broker or a USA online broker, there should be no difference in how fast the transaction is executed. But certainly when it comes to receiving dividend payments, I can see why CompuShares would issue cheques because they don't conduct any direct account holdings.

    I can't imagine choosing elsewhere to deposit dividend payments. I mean it could be a recipe for disaster in a tax audit. This is very different to say a personal cheque say a friend owes you money from a past debt where it doesn't matter where you deposit the funds.

  4. #19
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    Quote Originally Posted by SBQ View Post
    I want to clarify a mistypo. Majority of brokers hold the shares in 'street form' ; it should not be what I posted before as 'not in street form'. Following link is for clarification and reasons why it's preferable to hold the shares in street form and none other like we see in NZ:

    https://www.finra.org/investors/insi...g-street-names

    Sounds like your example in NZ with your broker conducting the trade is the shares are held under "direct registration" and the company holds the record for it's shareholders. This is different to holding in street form where the broker holds the record and the company only has a registration of so and so broker has this many shareholders on the company.

    Of course the biggest drawback of NOT holding shares in street form is the lack of timeliness of the trade. Say if you choose a different broker to sell your shares, the process doing so (setup account and registration) takes time.
    The lingo I am familiar with regarding this is 'issuer sponsored' or 'broker sponsored', which are the terms used in Australia. I have both 'issuer sponsored shares', for example those I have bought in NZ and shunted over to the Australian register, and 'broker sponsored shares': those I have bought through an Australian broker in Australia. To sell the 'issuer registered shares' I would have to transfer them to an Australian broker. However in both cases these shares are registered in my name. Correspondence comes to my physical address direct from the company. Dividend cheques are sent direct to me at my physical address.

    In NZ the system is different. I would say it would be unusual to not have shares registered in your own name. Yes it is possible to have your shares registered through a broker in that broker's name. But brokers charge a fee for this. Contrary to what you suggest, in NZ there is no delay in trading shares in your own name. The NZ share registers are fully electronic and actual 'share certificates' were done away with a couple of decades ago. So trades are instant either way.

    Yes there is paperwork to go through if you want to sell through a different broker. But this is to sort out terms and conditions with that broker. There is no real need to sell through a different broker though. Even if you are on the other side of the earth, you can simply ring up and trade. As long as the shares are registered in your own name, there is no need to contact the share register at all if you change broker.

    Your CompuShare is acting as the registrar of the shares and most likely chooses their 'own' broker in contract to conduct the trade. However, again it's timely to fill out forms and get that information to the broker in time and could take days or a week to execute the trade; worse all, they may not even have 'accounts balances' for their clients - meaning they don't accept dividends ; they're just basically like a real estate agent that conducts the trade by charging a commission but not actually treating their clients like a bank account. Also the verification process is the problem causing delay vs direct online access would avoid such problems. I mean whether a NZ online broker or a USA online broker, there should be no difference in how fast the transaction is executed. But certainly when it comes to receiving dividend payments, I can see why CompuShares would issue cheques because they don't conduct any direct account holdings.
    If you are now referring to my USA based shares you could be right. I am fortunate that both of the companies I hold now have dividend reinvestment plans. I am finding it easier to just reinvest and compound my dividends.

    At dividend payment time, I am sent a form not only outlining the details of my dividend reinvestment, but with a personalised tear off tab inviting me to submit more funds if I wished to buy some more shares. Yes this means it would probably take three weeks to buy shares (or however long the mail and Computershare USA office processes took). I think I can also ask for my shareholding to be reduced via Computershare USA as well, and that would incur a similar delay.

    I can't imagine choosing elsewhere to deposit dividend payments. I mean it could be a recipe for disaster in a tax audit. This is very different to say a personal cheque say a friend owes you money from a past debt where it doesn't matter where you deposit the funds.
    The tax department have a right to know what I earn. But I wasn't aware they had any say in how I should spend my money! I am not seeking to hide anything by depositing a dividend cheque in my Visa account. I am merely choosing to spend that dividend money to pay off my Visa bill! IIRC is was cheaper to deposit the cheque directly in the Visa account than put it in my everyday account and transfer it from there (a double handling alternative).

    All dividend payments come with an associated sheet of paper outlining gross dividend paid, imputation credits and withholding tax. I believe this information is sent direct to the tax department too. So the tax department have all they need 'in house' to do any audit.

    SNOOPY
    Last edited by Snoopy; 07-12-2019 at 08:16 PM.
    To be free or not to be free. That is the cash-flow question....

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