Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

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clast
Posts: 104
Joined: Thu Oct 04, 2012 12:50 am

Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by clast » Fri May 19, 2017 8:40 pm

I logged in my Fidelity account and noticed that I now have xxx.679 shares of AAPL. I looked in the transaction history and they reinvested the last dividend. I've owned these shares for 4-5 years and I am 99% sure I didn't set it to reinvest. I called and the rep told me that it was set to reinvest via the web site a few months ago. I'm not sure how to prove I didn't make this change myself (or maybe I did, and just don't remember, but I have no reason to have made this change - I like to spend my AAPL dividends on AAPL products!).

In any case, my question is, how do I get rid of this fraction of a share? The Fidelity rep said the only way would be to sell the entire position - I can't just sell a fraction of a share otherwise. I don't want to sell the whole position, as this would cause taxable gains. Has anyone ever had anything like this happen with Fidelity?

alex_686
Posts: 2483
Joined: Mon Feb 09, 2015 2:39 pm

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by alex_686 » Fri May 19, 2017 8:42 pm

A bit tangent - but why do you want to sell the fractional share? Reinvest the dividends back into the stock tends to be the default mode.

mhalley
Posts: 5077
Joined: Tue Nov 20, 2007 6:02 am

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by mhalley » Fri May 19, 2017 8:44 pm

If you like aapl then just keep the fractional shares. It's only a hundred bucks, just enjoy that fractional extra dividend. ensure dividend reinvestment is turned off now.
If you made the changes, they should have notifie you by email or letter of the change. From the Fidelity FAQ:
"The changes you make are effective immediately and you'll see them on your Dividends and Capital Gains summary page.
If you've signed up for email notifications, you'll receive a confirmation in 1–2 business days. If you haven't elected eDelivery you'll receive a confirmation by U.S. Mail in 3–5 business days"

https://www.fidelity.com/customer-servi ... tributions

Vanguard Fan 1367
Posts: 667
Joined: Wed Feb 08, 2017 3:09 pm

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by Vanguard Fan 1367 » Fri May 19, 2017 11:50 pm

I manage to have a life myself even though I have some fractional shares. It is nice of Fidelity to get rid of the fractional share for you when you get rid of all the stock.

I am sorry about the misunderstanding about reinvesting dividends, it is important for them to do what you want in that area. I recently went through my dividend instructions and made some changes based partly on what you Bogleheads recommend.

inbox788
Posts: 4099
Joined: Thu Mar 15, 2012 5:24 pm

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by inbox788 » Fri May 19, 2017 11:58 pm

Chances are you tripped up and signed up unwittingly. These sites are full of gotchas and some sites are very aggressive about getting you to sign up for paperless statements. I've been tripped up more than once on these, where check boxes are automatically checked or not checked and if you're not careful, you wind up doing something you don't intend. It's minor damage, and a constant reminder to read the fine print and be careful about what you click. Leave it alone until you're ready to dissolve your position. Go back and verify all your settings.

Exhilarate
Posts: 4
Joined: Mon Jan 02, 2017 3:53 pm

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by Exhilarate » Sat May 20, 2017 12:04 am

One way to fix this, though not worth the time in my opinion: Open an account with another broker and ACATS transfer your entire AAPL position to them. Fidelity will automatically sell only the fractional share. Wait a few weeks for things to settle (cost basis transfer), then transfer back shares to Fidelity. Read the fine print for both brokers on any account closure fees however, as those may eat up most of your dividend :happy

sweeden22
Posts: 29
Joined: Fri Nov 18, 2016 6:11 am

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by sweeden22 » Sat May 20, 2017 5:51 am

This happened to me with some of my Vanguard ETFs in Roth-IRA. I find the fractional shares in an ETF or stock to "look wrong." I have been tempted to do a buy/sell strategy to clean up my ETFs, sell and buy another ETF until Vanguard cleared out the fractional share and then buy back what I had. It just isn't the nicest thing for my portfolio history to do these games and temporarily own another ETF that would then be emptied.

I realize with AAPL this is not an option, you have tax issues, plus you would have to pay to trade. You probably need to live with the fractional share.

I only shared my story to show I know what you are going through, I do not like fractional shares, unless it's a mutual fund because of think of them as dollars rather than shares.

aristotelian
Posts: 2824
Joined: Wed Jan 11, 2017 8:05 pm

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by aristotelian » Sat May 20, 2017 6:27 am

First world problem if there ever was one! I have never really understood why fractional shares aren't the norm so that I can just buy by dollar amount rather than shares. The number of shares is arbitrary anyway. That said...

Have you tried setting to SpecID and selling that way?

How much of a fractional share do you have? If you are supremely OCD about this, hypothetically you could determine the next dividend amount and then buy or sell your position enough to get your fractional share exactly up to a full share. Of course you may get a rounding error and end up with a .98 share that will drive you even more crazy.

Alternatively, you can learn to live with it. It will indeed disappear if/when you sell the position.

mmcmonster
Posts: 161
Joined: Sun Jan 12, 2014 1:18 pm

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by mmcmonster » Sat May 20, 2017 6:42 am

aristotelian wrote:How much of a fractional share do you have? If you are supremely OCD about this, hypothetically you could determine the next dividend amount and then buy or sell your position enough to get your fractional share exactly up to a full share. Of course you may get a rounding error and end up with a .98 share that will drive you even more crazy.


I think the problem is that the fraction isn't allowed to be sold at all as it's an accounting thing rather than a 'real' share. It won't have a SpecID until it rounds up to another share.

And Vanguard won't allow you to sell (or buy) a fractional share of a stock.

In my case, when I sold some ETFs with fractional shares, Vanguard completed the sale of the whole units on one day and the fractional sale was completed a couple days later. As someone with a little OCD, it was quite disconcerting.

If I recall correctly, I sold the whole number of shares. Once the remaining shares was less than one, Vanguard automatically initiated the selling off of the fractional share.

livesoft
Posts: 56383
Joined: Thu Mar 01, 2007 8:00 pm

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by livesoft » Sat May 20, 2017 7:13 am

Like Exhilarate posted: One can open a new account and transfer a whole number of shares of AAPL into it. This will leave behind the fractional shares. You can actually specifically identify (versus purchase) the whole shares that you want transferred. There are no tax consequences to do this and should be no fees.

Then sell the remaining shares left at Fidelity which will get rid of the fractional shares, too.

May I suggest you open your new account at TDAmeritrade and collect a sign-up bonus, too?
This signature message sponsored by sscritic: Learn to fish.


Bastiat
Posts: 78
Joined: Thu May 26, 2016 11:07 am

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by Bastiat » Sat May 20, 2017 9:27 am

You cannot sell your fraction of a share. Nearly all of my individual issues have fractions of a share because a DRIP is a frictionless way of purchasing more shares.

It's pretty incredible to me that someone would go through the hassle of opening and closing accounts and positions to "fix" something that is literally meaningless. If not seeing a whole number on the screen/paper when you check your account causes that much consternation I would suggest calling your doctor and asking for a prescription of Luvox.

MotoTrojan
Posts: 699
Joined: Wed Feb 01, 2017 8:39 pm

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by MotoTrojan » Sat May 20, 2017 10:00 am

With Vanguard at least, you can consolidate the dividend into another tax lot by selling a whole share amount, then selecting the non-whole lot and a larger lot. Will consume the lonely dividend specid and then make the larger lot fractional.

CurlyDave
Posts: 188
Joined: Thu Jul 28, 2016 11:37 am

Re: Fidelity changed my AAPL to re-invest dividends, now I have a fraction of a share

Post by CurlyDave » Sat May 20, 2017 10:40 am

mhalley wrote:If you like aapl then just keep the fractional shares. It's only a hundred bucks...


There are a lot worse problems a guy can have. Ignore it.

If I sneeze before I hit the reload button my net worth changes by more than that. I suppose I could take allergy pills, but it really isn't worth the effort.

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