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physical stock certificates


ourkid8
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Hi all,  Does anyone hold their stock in physical certificates?  I am looking at transferring out some stock from my brokerage account as they are lifetime positions. 

 

1.  How does it work for positions held in a registered account (RRSP)?  If i transfer them out of my brokerage, will i have to pay the withholding tax or is there a way it stays registered but I just hold the physical cert?

2.  How about dividends, does the company directly send cheques to my house?

3.  Anyone know the rough costs? My brokerage wanted $50 for securities in my CAD account and the ones in my USD is $200 per certificate which I found very steep. 

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1) I don't think there is any easy way to hold physical share certificates in an RRSP.

 

2). Your dividends would be sent by cheque to you by the transfer agent. most transfer agents nowadays support diect deposit.

 

3). $50 per share certificate is pretty typical fee. That is what your broker charges to register the shares in your name and get the certificates to you.  Some brokers charge much higher amounts.. I think so they don't have to do it as often.  Its much more profitable to collect fees from transactions which are entirely automated :)

 

Consider where you will keep these certificates and what will happen if you get hit by a bus some day.

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1) do you know of the non easy way? 

2) great!

3) Ok, tks

4) hit by a bus, hahaha... A possible scenario, I have to think about it.

 

1) I don't think there is any easy way to hold physical share certificates in an RRSP.

 

2). Your dividends would be sent by cheque to you by the transfer agent. most transfer agents nowadays support diect deposit.

 

3). $50 per share certificate is pretty typical fee. That is what your broker charges to register the shares in your name and get the certificates to you.  Some brokers charge much higher amounts.. I think so they don't have to do it as often.  Its much more profitable to collect fees from transactions which are entirely automated :)

 

Consider where you will keep these certificates and what will happen if you get hit by a bus some day.

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Yeah, I've done this.  Fidelity will let you convert any number of shares of a holding into a physical certificate.

 

The process is simple:

1) Call Fidelity and tell them you want a certificate

2) The Rep will read you a list of reasons why it's a bad idea.  The rep is right, listen to them and consider if you REALLY want this.

3) About a month or two later you'll receive certified mail with your cert.

 

That's it.  Don't lose it or forget about it.

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I have thought about buying one share certificate of every stock I invest in so I can keep an album of sorts for posterity ;)

 

I thought it interesting when I read Mohnish Pabrai had put old stock certificates of his biggest failure(s) by the water cooler in his office so he's constantly reminded of them.

I forget where I read this though............

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In my previous company, which I worked for 16 years, I had a bunch of certificates that they had issued to me.  For some reason when they gave me stock they issued physical certificates rather than depositing them in an account.  It got to the point that I had a significant amount in a lock box in my house.  I started thinking that I wouldn't want to have that much cash in my house or that amount of value in physical gold in my house, why do I keep these things lying around?  I ended up depositing them all in my Fidelity account.  I'm not sure what the advantages of physically having them are, they could get lost, stolen, water damaged, burned in a fire, etc...

 

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I'm not sure what the advantages of physically having them are, they could get lost, stolen, water damaged, burned in a fire, etc...

 

I think it's more about them being cool/unique than it being the smartest decision in the world. I could see myself getting a small number of shares of my best (or worst) investments converted to certificates to hang in my office someday.

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You can get lost or stolen certificates replaced,

 

http://www.sec.gov/answers/lostcert.htm

 

I have known some high-net worth individuals who get physical stock certificates. I don't recall exactly but it has to do with the limit of protection you have if your brokerage firm goes under.

 

Edit: My memory is not what it used to be so know I am recalling it might be related to the long delay in getting access to your stocks if the broker goes under.

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You can get lost or stolen certificates replaced,

 

http://www.sec.gov/answers/lostcert.htm

 

I have known some high-net worth individuals who get physical stock certificates. I don't recall exactly but it has to do with the limit of protection you have if your brokerage firm goes under.

 

Edit: My memory is not what it used to be so know I am recalling it might be related to the long delay in getting access to your stocks if the broker goes under.

 

SIPC insures brokerage accounts for up to $500k of which a maximum of $250k can be cash. So if they have more than $500k in an account at a brokerage, there is the possibility that they could lose if the brokerage went under. Of course, SIPC protection is at the account level which means they could just open another account and transfer the excess balance over $500k, but maybe taking physical certificates appealed to them for some reason. 

 

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You can get lost or stolen certificates replaced,

 

http://www.sec.gov/answers/lostcert.htm

 

I have known some high-net worth individuals who get physical stock certificates. I don't recall exactly but it has to do with the limit of protection you have if your brokerage firm goes under.

 

Edit: My memory is not what it used to be so know I am recalling it might be related to the long delay in getting access to your stocks if the broker goes under.

 

SIPC insures brokerage accounts for up to $500k of which a maximum of $250k can be cash. So if they have more than $500k in an account at a brokerage, there is the possibility that they could lose if the brokerage went under. Of course, SIPC protection is at the account level which means they could just open another account and transfer the excess balance over $500k, but maybe taking physical certificates appealed to them for some reason.

 

SPIC is not a government agency, but is funded by member firms. I seem to recall SPIC has less than $2 billion in assets. I recall this was also part of their concerns.

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You can get lost or stolen certificates replaced,

 

http://www.sec.gov/answers/lostcert.htm

 

I have known some high-net worth individuals who get physical stock certificates. I don't recall exactly but it has to do with the limit of protection you have if your brokerage firm goes under.

 

Edit: My memory is not what it used to be so know I am recalling it might be related to the long delay in getting access to your stocks if the broker goes under.

 

SIPC insures brokerage accounts for up to $500k of which a maximum of $250k can be cash. So if they have more than $500k in an account at a brokerage, there is the possibility that they could lose if the brokerage went under. Of course, SIPC protection is at the account level which means they could just open another account and transfer the excess balance over $500k, but maybe taking physical certificates appealed to them for some reason.

 

SPIC is not a government agency, but is funded by member firms. I seem to recall SPIC has less than $2 billion in assets. I recall this was also part of their concerns.

 

Unless it were systemic, I'd imagine it's in the brokers' best interest to make sure SIPCs claims are made. If a single major broker went under and SIPC didn't make good on their promise, I imagine a lot of high net-worth individuals and retirees would be making changes like this. That being said, I can understand why that's not a gamble one would be willing to make.

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