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Hi all...

I've often wondered if we really need brokers holding our stocks. Can't we take possession of the stock certificates ourselves, and stash them in our bank box?

Then, I guess all dividends, etc are sent directly to us, right? It seems easier, somehow, but is there something I don't know about this? Do companies charge to send you the actual stock certificates??? Do brokers charge a fee for this also??

Sure would appreciate some answers here...

Thanks,

Cress
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I've often wondered if we really need brokers holding our stocks. Can't we take possession of the stock certificates ourselves, and stash them in our bank box?

Yes, you can. Many people, myself included, find it easier to leave the stocks at the broker, but it's your choice.

Then, I guess all dividends, etc are sent directly to us, right? It seems easier, somehow, but is there something I don't know about this? Do companies charge to send you the actual stock certificates??? Do brokers charge a fee for this also?

Yes, if you have the stocks registered in your name and take the certificate, the dividends will be sent to you, unless you choose to reinvest them.

I assume most discount brokers charge a fee for getting a certificate issued. Check the fee schedule. I know of at least one full-service broker that doesn't charge a fee, but their commissions more than make up for it.

TMF ExRO
Phil Marti
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All of the discount brokers charge a fee to send you the certificates. From the research I hav done on this the fee ranges from 15 to 40 dollars. The other disadvantage of holding the shares directly is that if you lose them you will need to pay to have the certificates reissued. Lucent and ATT charge 2% of the value of the shares to be replaced.

The only advantage I can see is if you want to particiapate in a DRIP and use the optional payments then you can buy more stock without commissions. Also if your broker has inactivity fees and you are a long term buy and hold holding the certificates may also make sense.
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Another reason to have the broker hold the certificates is that when you *do* want to sell the stock, you'd have to then set up a brokerage account, and send the certificates to a broker to sell. This all takes a lot of time. If you're needing the money in a relatively short period of time, it could make a difference.

And of course should you want to buy *more* stock, you'd generally need a broker, anyway.

So there really are more advantages than disadvantages to having your stocks with the broker. I use a full-service broker; I could arrange with them to have the dividends sent directly to me anyway, if I chose. So you really can set this up to work however you wish to, depending on the size of your account and the requirements of the broker you choose.
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You would be shouldering a lot of responsibility as well.
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Hi all:

Thanks for your responses to my wonderings. It seems that taking your stock certificates and stuffing them in a lock box (or under the mattress?) is not such a brilliant idea.

And I always thot my Dad was brilliant. Maybe he just liked counting the things every so often. But he did take them all and kept in a safe.

Can't ask him; he's gone to that big stock market in the sky. But I still wonder. He peeled off a few now and then to buy something (car) but other than that they just sat there. But then he had a trust set up.

Is that the secret? Is there a Trust Expert among you all that can shed some light here???

In the dark...

Cress
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Beging close to retirement and planning to live for 6 months in one state and 6 mos. in another, it makes sense to keep our stocks in a house account at a brokers. Then we can deal via computer and/or 800 number wherever we are. Things seem so easy today with auto-deducts from bank accounts to pay necessary utility bills etc. Think it depends on your individual situation. Being retirement ready perhaps would lead you to prefer a house account?
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The usual answer is "it all depends. . ." I have never been able to figure out any benefit to me if the broker should hold the certificates.

Do you have a personal business manager who pays all your bills each month? If you pay your own bills, then why shouldn't you hold your own assets as well?

The fees will vary. On-line brokers usually charge heavily to send the certificates. This service means they actually have to do something beyond pushing buttons on a computer. Full-service Brokers should charge very little.

Whether the dividend checks go to you or your broker account are simply a matter of your preference relayed to the stock-holders service office of the corporation. There should be no fee for this.

There is a problem of security and availability which ever way you do it. Brokers can misfile papers and you can forget to get the certificates to the bank box.
The broker will tell you that the certificates are guarenteed and insured, but actually collecting the certificates if the broker goes out of business can be a time consuming hassle. The broker may not have actually purchased them for yoy, rather they may have only made an internal "paper" transfer of stock in that company held in the name of the brokerage. If the broker goes out of business, yes you will get the certificates eventually, but in the meantime you CANNOT sell them and if the price is dropping during this time, you get to eat the loss.

Unhappily, brokerage houses have a tendency to fad away when the market is dropping, not when the market is going up.
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Hi US Fools,

this is Jörg from Germany, and I found your discussion via the hot topics page. You can't imagine how surprising this discussion is for a German. So obviously, many of you really keep your shares at home? I think many German stockholders don't even know that's possible.

Where's the advantage of taking care of everything if a broker does it for free (or nearly free)? Aren't they obliged to reimbourse you if they made a mistake that caused you to lose money, e.g. misfiling something? Aren't they insured?

Maybe some of the following is true in USA?

If you hold the certificates at home, you must take care of everything yourselves. In Germany, we have bearer shares usually. That means: You must watch for stock splits. You must claim dividends. Claiming dividends means that you cut coupons and go to the designated bank and collect the money. Walking around with coupons is just as safe as walking around with money since nowhere is your name on them. It's annoying, too. Btw, you should better insure your certificates for the same reason. And don't miss to read all those boring official journals where the company could announce any capital transactions. If you want to sell the shares, you'll have to bring them to a broker first. It can take weeks to get them registered, I think. So, this isn't the fast way to sell anything.

The other possibility, i.e. let the broker do everything for you, is convenient and probably not more expensive than the insurance for your certificates. Since our brokers are usually big banks, they won't go out of business that fast. If they do something wrong, they must pay your bill.

So, more and more corporations don't even print certificates any more. That means, of course, that you cannot even get certificates from each company out there.

Greetings from Germany,
Jörg
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Brokers charge to send you the certificates but you have to have at least one in your possesion to get in DRIPS. Plus that way you can add more money without the help from a broker.
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I have accounts at TDWaterhouse and have enrolled all my accounts as DRiPs. This means that any stocks I hold in these accounts are automatically in the DRiP if the stock offers such a plan. So all my dividends are automatically reinvested with no effort on my part. This is not the same as adding more money to your position by buying the stocks without commissions which you can do in some cases if you own the stock in your name. However, since I don't plan on investing that way at this time the loss of this capability is not a big deal for me.

Jim
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Oh, in the good ole' days they didn't charge for sending you your certificates. . .In the days before the 'TD', Waterhouse sent them out free of charge. . .And it was simpler if you spend your dividends . . .Now they charge $15 at Waterhouse and assure me that it is a standard in the industry. . .So at least I can let the security box at the bank go. . .
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I own several stocks in a self directed IRA with Vanguard Brokerage Services. All the dividend paying stocks are enrolled in DRIPs with no commission charge from VBS.

Since the stocks are in an IRA I don't believe I have the option of taking posession of certificates. But since there are no charges for the DRIPS I see no disadvantage.
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