Computershare Guide

Here is everything you need to know about Computershare to put YOUR MONEY at work. I kick started my new dividend investing financial plan through Computershare and step by step increased my net worth but also my income from my investments. I am the type of person who wants to be in control of my destiny and seeing my money making money even when the stock market is a roller coaster. When the markets are down, I can see that my money is still at work making money. With Computershare, if you start early, your pennies will be at work, not just a full share or even 10K worth of a share.

Related: Guide to DRIP

What is Computershare?

Computershare is a company that helps manage stock plans for companies along with DRIP accounts. Computershare is not a discount broker and you cannot have any other accounts than a non-registered taxable account.

Some key facts about Computershare:

  • It’s available in many countries (Canada, US, UK, Australia, …)
  • The list of companies supported is listed on their site. Note that other companies also exist that provide a similar service such as CST Trust Company.
  • Purchases are either made by sending a cheque or direct purchase where available.
  • Fractional shares are supported.
  • Discount on DRIPs is available at the discretion of the companies represented. Those are subject to change.
  • No cost for purchase transactions.
  • You have no control over purchase prices.
  • Optional Cash Purchase (OCP) are always made on pre-determined days – usually around a dividend payment.

What it means is that you can start with just one share. With that share, you start earning dividends and all your dividends are re-invested through fractional shares. Your fractional shares also earn dividends. You are definitely having the full compound growth effect on your money.

Related: Easy Investing With Computershare

Why Consider Computershare?

This is going to be a bold statement but …

I believe every parents should start a Computershare account for their children to show the power of compound growth through dividend investing. Time will do the work along with some regular contributions.  

If a child can ask how and why is it worth so much more than they should be interested in keeping it, managing it and nurturing the accounts along with asking more questions around investing and finance. There is a big difference between making and managing a budget versus growing and managing a portfolio.

As an adult, there is no better time than now to put money aside. Putting $50 in a savings account doesn’t really go far anymore. Instead, you can pick a company that provides a necessity in our life and invest the $50 with them. A bank is a really good example, even if you do business at the credit union :) Derek Foster wrote The Lazy Investor which outlines details of his strategy.

It’s not always possible for someone to invest in stocks through a discount broker and the fees and I would argue that mutual funds are expensive with high MERs, you are then left with not a lot of options.

Getting Started With Computershare

Getting started with Computershare is not something easily explained on their site. In fact, I found everything I needed through DRIP Investing. There are 2 ways to get setup:

  • Have someone who is with Computershare transfer a share from the company you want in your name. You pay the person directly for the price of the share agreed between the 2 of you.
  • Purchase a share through a discount broker and request the share certificate from your discount broker. A fee is usually expected with this and can be more than the share itself. Then you can send it to Computershare to register with them.

The first option is by far the easiest. Finding someone who has a share to transfer is done by contacting someone on the forums. It seems scary but I have done it for 11 companies without any hiccups. I either made payment by cheque or by email money transfer.

Getting Your Kids Started

You don’t need to be setup yourself to have your kids setup. You can use the steps in the previous section to setup your kids. You just have to put them in trust so that you can have control over them until your kids are old enough. Note that taxes from the shares in trust are usually attributable to the parent. See a tax accountant for more details.

If you want to transfer shares to your kids that you already own with Computershare, the process is simple. You have to fill a form for each company you want to do it for. I have outlined the steps I took with my kids in the related post.

Related: How To Transfer Shares To Your Kids

Transferring Shares To Another Person

This process is the same process I used to transfer shares to my kids. The only difference is that you are transferring shares to someone else whereby you have agreed to a transaction price for the share.

You should note that a transfer of share to another person is considered a disposition and is taxable.

Withdrawing Shares From Your Computershare Account

There will be a point where you might want to move the shares to a discount broker. The only way to do this is to request your shares. Computershare has improved its website and you can initiate all those transactions online now whereas other transfer agent companies might require a letter.

You have 3 options when requesting your shares.

  • All available shares. Terminate from the plan.
  • All available shares. Remain in the plan.
  • A specific number of shares.

Sell Shares From Your Computershare Account

You can request the sale of shares if the company represented by Computershare allows for it. You would not have the choice of the selling price just like you don’t have the choice of the purchase price when making contributions. The proceeds would be sent by cheque.

DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.