Chess vs Issuer Sponsored

[Lizard]

I'm asking a newbie question...

I've been investing since 1996 and use two "dinosaur" accounts with telephone access for investments. I also have a DB account for trading so I can keep things clean with IRD (and in my head!).

Am now looking at moving to ASB securities for investments, but it bothers me that I would need to go to CHESS, as have never done so. The main reason is that I just can't figure out whether there is any additional risk attached to CHESS? What happens to your holdings if your CHESS sponsor goes broke? How easy is it to transfer to another CHESS sponsor if you get antsy with them?

The new financial advisor regulations are the final straw - after 15 years, it seems insulting to be asked by my broker to fill in forms about my investment capital, goals etc for "know your client" stuff... I understand, but, after all the chats, lunches and drinks, I can't believe my "wealth advisor" no longer "knows" me... I've ticked the "transact only" box, but doubt they'll give me a discount for no advice...

[POSSUM THE CAT]

Lizard Chess allows quicker trading as your broker as full details of your holdings & does not have to check with the registry every time you trade. This allows cheaper brokerage & most Brokers will not deal with you unless you are Chess sponsored. Direct broking will let you have Two accounts.One for trading & one for investment you need to give them slightly different names. See Alice Savilles comments on the Direct Broking Thread

[trackers]

How easy is it to transfer to another CHESS sponsor if you get antsy with them?
.

ASB have to go through CBA for everything so it takes some time, but in principle, though, the process is fairly straightforward (sign a form providing details of holdings / new broker etc)

[OldRider]

Hi Lizard,
I have used CHESS sponsorship for many years, never a hitch. I have never transferred my sponsorship but understand it is as trackers says just fill in a form and it can be done ,without charge too.

Perhaps you should be aware though, that is the end of the free bit, if you wish to change a holding from CHESS to issuer sponsored it costs about $50.00 per company, as well if for some reason ownership of the shares changes, in my case it was the addition of a new trustee to the family trust, then the change needs to be made for each company at the same $50 fee per company. Ten companies $500.00.

It is possible to avoid this in the future but probably more than it is worth unless for a large portfolio

[Lizard]

Thank you for the responses. Interesting about the fees!

Have decided to just move the trading stuff into ASB/Chess and swap the investment to DB. Will mean a bit more hassle until everything has transferred to the right place, but I think will work better than the other way. I think I would find having two accounts on DB more difficult to separate in my head.

Still not 100% certain about the legal ownership situation if CHESS sponsor becomes insolvent, but will go with the comforting thought that the probability is slim enough to ignore - and won't be all my funds.