Simplifying: want to move DRIP from C'share to Schwab

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phxjcc
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Joined: Thu Aug 23, 2018 3:47 pm

Simplifying: want to move DRIP from C'share to Schwab

Post by phxjcc » Sun Apr 14, 2019 11:17 pm

Long story short, have BAC shares in a DRIP program administered through Computershare.

No fees, nor transaction charges.
Probably a grandfathered program that I inherited.

Just want one less account.

Value is $X0,000, where X<5.

Anyone ever do this?
Anyone know of Schwab DRIP fees, if any?

Thanks!

PS: Not selling them.

mighty72
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Re: Simplifying: want to move DRIP from C'share to Schwab

Post by mighty72 » Sun Apr 14, 2019 11:20 pm

I don't know about Schwab but none of the brokers I dealt with had any DRIP fees. This includes E-Trade, TD Ameritrade and Fidelity. I would think there should be no fees at Schwab too. One thing I would double check is that brokers on both ends can handle cost basis or you get a snapshot before the transfer

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David Jay
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Re: Simplifying: want to move DRIP from C'share to Schwab

Post by David Jay » Mon Apr 15, 2019 8:49 am

DRIP plans are legacy programs going back to the days when trading costs were so high that it made the re-investing of dividends too expensive to justify for the small investor. Today, virtually every low-cost brokerage offers free dividend reinvestment - just check the box.

The problem is moving the shares to an low-cost brokerage (Vanguard, Schwab, Fidelity, TDA, etc). This article states that the shares are not marketable and that you will need to redeem the shares from the company directly (i.e. you can’t transfer the shares “in kind” to a brokerage house): https://www.investopedia.com/terms/d/di ... ntplan.asp

If the above is correct, you will need to pay capital gains on the sale of the shares. I would contact Compushare or BAC investor relations to understand your options.
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Topic Author
phxjcc
Posts: 98
Joined: Thu Aug 23, 2018 3:47 pm

Re: Simplifying: want to move DRIP from C'share to Schwab

Post by phxjcc » Mon Apr 15, 2019 3:09 pm

Thanks.

livesoft
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Re: Simplifying: want to move DRIP from C'share to Schwab

Post by livesoft » Mon Apr 15, 2019 3:11 pm

David Jay wrote:
Mon Apr 15, 2019 8:49 am
DRIP plans are legacy programs going back to the days when trading costs were so high that it made the re-investing of dividends too expensive to justify for the small investor. Today, virtually every low-cost brokerage offers free dividend reinvestment - just check the box.

The problem is moving the shares to an low-cost brokerage (Vanguard, Schwab, Fidelity, TDA, etc). This article states that the shares are not marketable and that you will need to redeem the shares from the company directly (i.e. you can’t transfer the shares “in kind” to a brokerage house): https://www.investopedia.com/terms/d/di ... ntplan.asp

If the above is correct, you will need to pay capital gains on the sale of the shares. I would contact Compushare or BAC investor relations to understand your options.
The above is not correct for whole shares. So if one has 31122.344 shares of BAC there is no problem transferring 31122 shares in-kind. Just keep good records of your cost basis just in case. Many people do/did not keep track and that's why they won't sell. They prefer to die and let their heirs sell. If that's the case be sure to tell one's potential heirs the situation: They are supposed to sell those shares of BAC and not attach any sentimental value to them.
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