A year ago I bought 10 X stocks. Time flew by and I checked my stock account and I had received a whopping 10 EUR in dividends. Sadly it all was eaten by account management costs, which is about 24 EUR in year.
Simple mathematics state that you can’t earn this way. I did some reading and found this Direct Registration System, and from what I understand it would fit perfectly to my needs (I guess I need to add that I’m from European Union) as I want to do a long term investment and I’m not worried I won’t be able to sell the stocks fast.

  1. Is there any reasons I would need to keep my expensive brokerage account or to paraphrase – is there any reasons to stick with brokerage firm?

  2. Let’s say I have decided to leave it. When I tell my broker that I want to register my stocks what happens next? When they register my stocks with the issuing company then my brokerage account becomes empty and I can close it?

  3. Let’s say I don’t have a broker any more. How can I acquire additional stocks? More importantly how can I acquire stocks from other companies (US and EU)?

  • One of the advantages of mutual funds is that you can open an account directly with the folks running the fund, no broker required.
    – keshlam
    Apr 26 '15 at 23:32
  • Upvoted, as it highlights how important minimising costs is when it comes to investing. Apr 27 '15 at 4:42
  • Which country are you in and are you talking about directly holding shares in your own name or via a nominee. All eu countrys have there own diferent rules on how their stock markets work.
    – Pepone
    Feb 23 '16 at 0:03

You'll need to talk to your broker about registering positions you already hold. I would personally expect this will cost you a not-insignificant fee. And I don't think you'll be able to do this on any shares held in a tax-advantaged account.

That said, I'd recommend you go to the Investors sections of the company's website in question. This will usually tell you who the registrar of the company's stock is, and if they offer any direct-purchase, or DRIP, programs. You should find out from these contacts and program details how the direct program works and what it's costs are.

I suspect, but have no firsthand knowledge that this will be true, that you'll end up with lower costs if you just sell the shares in your brokerage, take the cash out, send the cash to the registrar and re-purchase shares that way. I say this only because I know, from inheritance situations, that de-registering stock cost me a $75 fee at my brokerage, whereas transactions at the registrar were $19.95.

My answers to your direct questions:

  1. I know of no reason you can't drop your broker and go with a direct registrar plan.
  2. It should become empty and thus can be closed, but you'll likely need to pay their fees first.
  3. Visit their site and find their registrar. Contact them to purchase shares under direct registration. Use their DRIP plan if you want to re-invest dividends.

(Edited to fully answer the question with itemized answers.)

  • Thank you for the input! I guess all depends of one’s country - asked my brokerage and got reply that they don't do direct registration for foreign stocks. I was disappointed but didn't do anything because I'm long term investor (read lazy). What happened eventually was that the brokerage packed and left my country so they just returned some money. I think the most important lesson I learned was that I never owned anything. Mar 9 '16 at 13:54

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