Easy Investing With Computershare

ComputershareAre you familiar with Computershare? I learned about the marvels of Computershare in my mid-thirties and I must admit that I wish I had learned about it in my early twenties. I learned about the existence of transfer agents when I read The Lazy Investor book about dividend investing but I must admit that the book is really teaching anyone about being a lazy investor by investing in long term stocks as opposed to mutual funds.

As a new investor in my 20’s, I was struggling with buying stocks since I did not have enough money to make it worthwhile to pay $29.99 in transactions (yup, that was the price back then). Instead I bought monthly income mutual funds as I did not know any better about the fees or about index investing which I also learned much later on in life. If I had known about Computershare, I could have started investing in dividend paying stocks early on as I was already familiar with the dividend concepts as income.

If you feel that you struggle buying your first stock or that you need a lot of money to get started then you need to read through and learn about transfer agents.

Computershare is the best medium to follow in the footstep of Grace Goner who turned 3 shares of Abbot Laboratories purchased in 1935 for $185 into a $7 million fortune 75 years later. Patience and compound growth is all she needed.

Related: How to start investing with little money

Computershare Details

Computershare was funded in 1978 and hails from Australia. It’s now present in 20 countries and provide investors and employees with a stock investing service for many companies. As a Canadian, there are many good companies to invest in and the same applies to U.S. investors. Below is a short list of companies available with many more on their website. So far, my experience is strictly with buying Canadian companies and I am very satisfied so far. I’d love to hear the experience from anyone else.

Below are example of companies available through Computershare. As a note, there are other transfer agents such as CST Trust Company or Valliant Trust.

Example of Canadian Companies

Example of U.S. Companies

There are many more blue chip stocks available through Computershare and the other transfer agents. I strongly recommend you pick strong dividend growth stocks in order to let them work for you. When you put fractional shares, dividend re-investment and dividend growth together, you get strong results over time.

My Computershare Journey

Slow and steady work and I wanted to show you how my Computershare account grew in the early years. Below is how I grew 5 stocks in my Computershare account. The growth you see in the graph represents my contributions varying between $50 and $600. Slowly and surely it will grow. This strategy is not a stock or price picking strategy, it heavily relies on dollar cost averaging and dividend compound growth through fractional shares.

Computershare Portfolio Growth
Computershare Portfolio Growth

The one dip in early 2012 represents shares I transferred to my kids for 3 different companies. As I mentioned, I wish I had found this way of investing in companies earlier so I am getting my kids going very early on. By the time they reach their 20’s, I hope they can see the value in slowly adding to a dividend income portfolio.

Related: How to transfer shares to your kids

5 Years Later

After many years of adding small amounts to Computershare, I grew many accounts into the thousands. Over the years, between my Computershare and my discount broker account, I was holding some of the same stocks and decided to consolidate. When consolidating inside my discount broker I lost the ability to invest fractional shares but at this point I have more money to actually buy full share anyways. My kids are still at it and investing two times a year and with a small portfolio, they fractional shares work for them.

I also got wiser with regards to holding REITs in a non-registered account for tax purposes. The tax management for return of capital is too painful to do in a non-registered account.

I consider Computershare the only way to invest early with small amounts as well as being a great tool for teaching about investing. The earlier you start the more data you will have to show what compound growth is all about.

Readers: Are you investing using Computershare? What do you think?

23 Responses to "Easy Investing With Computershare"

  1. Just curious does compushare act like a discount brokerage, where you can buy and sell stocks whenever you want online? for free? can you still use your TFSA? can you transfer money electronically back and froth within a day or two?

    Reply
    1. The Passive Income Earner · Edit

      @desenns
      It’s not a discount broker and you can’t buy/sell on demand like discount brokers do. Purchase order are call OCP (Optional Cash Purchase) and you need to mail a cheque. You can sell but I have not done it. They can transfer the proceeds to your banking account. You can also transfer to your discount broker.

      My plan is to transfer when I have a decent amount – something like $5,000.

      Reply
  2. Great post. I used to use Computershare, but no longer. I used it until the stocks I held with them were able to DRIP synthetically. Now, those companies are in my unregistered account and in my TFSA. I only DRIPped Canadian companies and my experience with Computershare was excellent.

    I saved tons of money over the years without paying commission fees. It was awesome. The compound growth with fractional shares was outstanding as well. I’m so glad I did this.

    DRIPping stocks is really a get wealthy eventually strategy, that works.

    Cheers,
    Mark

    Reply
    1. The Passive Income Earner · Edit

      @My Own Advisor
      ah! So you are well ahead of me in building it up. So far, I do little amounts with Computershare, $5K with TFSA in January and than I try to do RRSP so I can buy more US companies. My self-directed RRSP is now 80% U.S. and 20% CDN. I am conscious of the CDN dollar strength and want to leverage it with the U.S. conglomerates while I can.

      Reply
    2. Hi My Own Advisor
      May this post reach you way too after the initial publication of your comment…and you probably forgot already this topic but anyway… I would like you to share your opinion on this whole Computershare thing, considering the account is a nonregistered account that have to pay dividend tax as well as discount brokerage are now offering synthetic DRIPs with no commission fees.

      To me all the hassle in terms of taxes plus fees (with US stocks) and paperwork is not worthwhile but I do not have the experience you had, specially with CDN stocks, so much appreciated your comments on this topic.

      Cheers,

      Reply
  3. The Passive Income Earner · Edit

    @Rob
    Thanks for your comments!
    Glad to see another dividend blogger with Computershare 🙂 I have not personally done any US purchase as a Canadian but I know it’s possible.

    Reply
  4. On the Topic of discount brokers…I am currently using Credential Direct cause its affiliated with my credit union. I’ve heard Quest trade has the cheapest trade fee’s in the industry in Canada. Just curious if anyone here has used them before and if its worth changing over to them for the 4.95$ fee instead of $19 like I get a credential. Thanks

    Reply
  5. Thumbs up to Computershare, took a little patience to get going but now DRIPing BMO,BNS,EMA,FAP,FTS,SU,T,THI,TRP through Computershare.

    There is usually someone out there willing to sell you a starter share to get going.

    Reply
  6. Thanks for the good article!
    Quick question, is it possible to have an RRSP account with computershare? The idea is put stocks I have from my employer (through a direct stock purchase plan) in an RRSP account.
    Thanks!

    Reply
  7. Hi,
    I am wondering how to open an account with ComputerShare? What kind of accounts they have for the new investors? Also, what is account fee like per month/per year? And how to add tax saving option?
    I want to start with a small amount e.g., $1000.00 to begin with.

    Thanks a lot.
    Jay

    Reply
  8. ComputerShare is awful. I went to their site to open and account….. but you can’t unless they’re holding your stock. I try to use the transfer wizard to transfer stock from my broker, but you have to have an account first!! WTF?!?! Can’t open an account transferred stock, but can’t transfer stock unless you have an account.
    That bit of ignorance should have been a red flag…..
    Eventually I have my broker initiate the transfer and have spent the last 3 weeks trying to buy stock in a company but with no success. Their website is poorly designed. The customer service borders on brain dead. I have made 8….yes 8 phone calls to them trying to figure out why I can’t buy stock online. The best I’ve gotten is that I’m not authorized to buy stock. Why? because I don’t have an ‘access code’. Why don’t I have an access code?…you guessed it, because I’m not authorized to buy stock. Again WTF?
    I wish I’d never gotten involved with them. Sadly, I can’t sell the stock I have….because I’m not authorized to perform transactions in my account. Why? …. because I don’t have an access code :-S
    Try…I challenge you…to find an email address or phone number to someone in their corporate headquarters to complain to about their customer service or pathetic website.
    One of my favorites is that they told me that I could mail them a check to buy shares. Which makes me choke more….the word ‘mail’….’check’….’COMPUTERshare’ … or the fact I tore 1978 off my calendar a long time ago.
    My advice….stay away from ComputerShare.

    Reply
    1. Computershare’s role is pushing paperwork. Literally. If you are open to doing it their way, it’s a great way to passively build substantial wealth over 20 years.

      Money doesn’t care if it transferred via Square on iPhone or via posted paper check.

      Reply
    2. I completely agree. My accountant turned me on to DRIPS and suggested ComputerShare. I also repeatedly tried to open an account….which you cannot do online. I made multiple calls that got me nowhere. They once told me they would be sending me a “packet” in the mail that I would have to complete to get started, but it never arrived. I have DRIPS elsewhere now. I could press the issue and continue to try to start DRIPS with CS, but if it’s this hard to give them my money, then imagine what it’s like trying to get it out. There’s no way I could ever trust these people with any amount of my money. This company is truly the most ridiculous train wreck I have ever dealt with.

      Reply
  9. MAB – You are correct. Computer share is great way to build wealth passively. We bought 100 telus shares when they first came out in 1990. The DRIP has served us well. We have never added to them or taken any out. It grows and grows. We also love this website and appreciate all the work put into it.

    Reply
  10. Computershare and CST are the two major Transfer Agents and offer the best method for individuals who do not have a lot of money to invest in great companies.

    They are not intended as Trading accounts and usually it takes a bit of work to get them started, but it’s well worth the effort. We started DRIP accounts for our grandkids and with small investments and dividend reinvestments, they are well on their way to accumulating a nice sum for their future.

    Sure the dividends are taxed, but unless ones taxable income is over $40k you will not pay any dividend tax. If ones holdings in the DRIP becomes large, setup a TFSA and transfer some of the shares into that account.

    Nice article!!

    Reply
  11. Well, i am total beginner , all i know is i would like to buy some stocks ( i have some extra money and if i don’t invest now that pile will be gone very soon ) I see you are very happy with computershare so if you could give me step by step instructions that would be great . Thank you

    Reply

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