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Friday, July 30, 2010

DRIP marketing discount offer by some Canadian companies: bonus on top of the dividend

I just notice 2 dividend payments: 15.33$ from Davis + Henderson Income Fund (DHF.UN) and 21.81$ from the Consumers’ Waterheater Income Fund (CWI.UN). This bring my dividend earnings to a total of 345.43$ for the month of July 2010. Today is my last day of my summer vacation, it was pretty relaxing since I slept in a lot and did almost nothing at all… But it was just what I needed, just to have nothing to think about. I had received my vacation pay. Again, I have a nice little very tight budget for the month of August. I hope to be able to invest again in September or October. I am not very sure of what my next stock trading will be made of. We’ll see. For the month of August, I plan to save around 1 100$ in cash. Nothing major for my online savings account, but it’s the best I can do with my current labor employment situation.

Yesterday was very beautiful day in Montreal so I took a long walk all the way to Montreal Old Port. After what I stop by the Chapters and take a look at a financial planning book I had seen before but never read: Debt-Free forever by Gail Vaz-Oxlade. Very good book about how to get out of debt. I find Debt-Free forever very inspiring and it actually reaches me in many ways. She talk about credit card balance transfer (the fun stuff!!!), about destroying credit card with a pair of scissors (awesome part!!!) and so on… Personally, I went through many things that Gail Vaz-Oxlade describes in her book. I went through them in order to not pay off debt, but to invest. I actually like the part where she suggested getting a second, and why not a third job as a clear debt solutions… This is me! She also openly talks about getting laid off of jobs before currently doing what she’s doing….. That’s definitively me… Thanks to BMO Bank of Montreal, I know what’s laid off is all about. She also talks about staying at home while taking vacation….. That’s actually how I spend my vacation: at home! lol!! Anyhow, I think I had discovered something very special with Gail Vaz-Oxlade writing and I will stay tune to her Web site.

I slowly begin to see the rewards of my online investment portfolio and my debt(s). Just Energy Income Fund (JE.UN) is slowly growing to reach the 14$ per unit, Pembina Pipeline Income Fund (PIF.UN) had exceed the 18$ per unit, etc. At a point, in the last couple of days, my non registered portfolio almost reach the 50 000$ by itself. The value of my portfolio is relatively stable and I am very happy about it. One investment after the other had bring more and more value to my online investment portfolio and I am pretty sure that one day, my 15 000$ investment mistake will just disappeared by itself, without leaving any traces.

I call TD Waterhouse broker just to find about a question that been posted under my blog entry: Switching to a cheaper online broker: Scotia iTrade. Some companies offer a discount to enroll on a DRIP. The question was if brokers were offering that discount. In my case, I deal with TD Waterhouse broker. I heard about discount before but I wasn’t really sure if I had accessed to the discount while being with TD Waterhouse broker. With TD Waterhouse broker, I have 3 types of broker account: non registered (in Canadian dollars), TFSA and RSP. I am registered to a DRIP in all 3 accounts. So I was curious to find out if I had accessed to the discount or not.

A good resource to find out about DRIPs and discount being offer in Canada is on the Web site Canadian Dividend Reinvestment Plans (DRIPs). In my online investment portfolio, the following top dividend paying stocks are offering a discount to their stockholders:

Bank of Nova Scotia (BNS): 2% discount
Emera (EMA): 5% discount
Just Energy Income Fund (JE.UN): 2% discount
Pengrowth Energy Trust (PGF.UN): 5% discount

The discount is being offered on the DRIP shares. In my case, for all investment I hold, I only deal with small sum of money, but it still worth it to enroll on a DRIP. In my online investment portfolio, 4 companies I hold are offering me the discount.

I got the answer to my question from a TD Waterhouse broker representative. But the person who answers me wasn’t really nice. I find sometimes TD Waterhouse broker rep to be really rude and arrogant. But it’s not the case with every single representative, but still. I got a couple of bad experiences, always with French representative. I explain the rudeness because I talk to a bilingual representative. TD Waterhouse broker has a customer service call center located in Montreal. Overall, I am not being impressed at all by TD Waterhouse broker services and it’s very too bad that Bank of Nova Scotia didn’t approve my RSP loan because I would have switched to their iTrade discount broker. I just hate it when a TD Waterhouse broker representative say something to me, just like it happen today, of this nature: “As I just explain it to you” bla bla bla….. If I need clarifications, I should be able to ask without anything else being add. After all, I am kind of a successful investor and if I need to ask questions, I will ask them. All of them. But shouldn’t be surprise by bad customer service offer by Quebeckers. While living in Quebec, I am living outside Canada. It’s in Quebeckers real nature anyway to treat people like shit. Just take a very close look to their wonderful educational system and health care and see what’s going on. Quebec province is slowly dying on itself and I am very hoping for a wonderful long and peaceful death.


Anonymous said...

You cannot acess the drip discount via TD Waterhouse or any broker. To acess it you need to register your shares with the company directly buy buying one share certificate and transfering your share from the broker to the company via their transfer agent. All the info is in Derek fosters Bood and online.

Sunny said...

WOW.. That's confusing, especially knowing that I call TD Waterhouse and I was told I was getting the discount automaticly. I think you are saying right. TD Waterhouse are so a little bunch of .

Anonymous said...

Its me again Sunny. I called my broker and asked the question and was told I cannot get the dicount without dealing directly with the company which sucks because its a lot of effort and reduces your liquidity. It would be nice to get the 2% dicount with BNS and the 3% with TRP and
2% with BMO etc

Unknown said...

Actually, according to TDW does "honour the DRIP discount" and passes it on to the investor. I emailed Scotia iTrade regarding this as well (they're listed as honouring it but I just wanted to confirm) and got this:
"If the stock offers DRIP we will purchase the stock for the client at discount and we only purchase whole shares. "

Unknown said...

Just did a follow up to make sure I didn't misunderstand the rep's comments

Thank you for choosing Scotia iTRADE.

That is correct. If you'd like to enrol your shares in the DRIP please let me know your account number(s) and the securities you would like enrolled and I will enrol them for you.

Feel free to reply with any further comments or questions you may have.

I asked:
"Just to make sure I understand:
if an issuer offers say a 5% discount on shares purchased via DRIPs, whole shares for that issuer that Scotia iTrade purchases for me via DRIP would be at a 5% discount on
the share prices?"

I got back:
"That is correct. If you'd like to enrol your shares in the DRIP please let me know your account number(s) and the securities you would like enrolled and I will enrol them for you."

Dividend Lover said...

don't worry you get the discount.

what you don't get is fractional shares ( you can only reinvest into full shares and you get the change in cash)

Sunny said...

Yeah! I am getting the discount! That was a good point anyhow to discuss about. I wasn't too sure if I was getting or not. But it come with the DRIP. That's nice.

Sunny said...

Yeah! I am getting the discount! That was a good point anyhow to discuss about. I wasn't too sure if I was getting or not. But it come with the DRIP. That's nice.

pec major formorly anony said...

I guess I should switch to TD Waterhouse. It would be worth it as I love discounts. When I called my current online broker they said they would not honour the discount!

Sunny said...

Too bad your broker do not honour the discount. But what they do with the money? Keeping it for themselves? TD Waterhouse is ok most of the time, just that I got rude last time when I call to have info regarding the disount. Also, if you hold less than 100 000$ as portfolio, you'll pay 29$ per trade... Quite some great deal of money for small investors. Take a look at Questrade. But I don't know if Questrade honor the discount or not.

Anonymous said...

As of November 4, 2010, the trade fee is $29 if you hold under $50,000 in assets. ($9.99 per trade with over $50,000).
I too use TDW and I'm trying to figure out all the fees they are going to charge me if I set up a DRIP for my RY shares (if I can even set up a DRIP through TDW)...

Anonymous said...

Some confusion around the DRIP discount. When you receive dividends with TDW, you can indeed receive the discount. I was told it was automatic, you don't have to ask for it. That is up to you. When the dividend $$$ is received by TDW, it actually purchases the stock on the market (synthetic drip) or it has an arrangement with Computershare or other to purchase the discounted shares there. Discounted Drip shares will take a few extra days to appear in your account. I don't want to be rude, but seriously some of you should at least make a phone call. You do NOT need to register your shares.

Sunny said...

Bah it's ok. Stock and stuff can be sometime complicated. This was written a little while ago. Back in the time, I had call TD to find out. As long you are registered with a DRIP, if a discount is provided, you automatically received it. That's very all. Not complicated, but its when you don't know that it get complicated.

Anonymous said...

Anonymous II:

Great Posts.

So TD Waterhouse honours the DRIP discount (if any) as long as your have enrolled in the company's DRIP program.

Does any one know how TD Waterhouse knows that you've enrolled in the company's DRIP program?
How does that work?

Or do you still have to phone up TD and let them know what DRIP's you have enrolled in to get the discounts applied?

Anonymous said...

In order to get a DRIP with any stock, you must register with your broker or the transfer agent.

Broker's offer synthetic DRIPs, which mean whole shares only with rest in cash.

In terms of the company, who offer discount trough there DRIP program. If you broker purchases shares through the transfer agent, then the DRIP discount should be passed onto you. If the broker buys shares though the transfer agent and does not pass the DRIP discount onto you, than that is just plain wrong.

If they buy shares in the open market, there would be no discount.

I Dripped YLO before through Questrade and they told me they do not honor the discount. "Questrade does not offer the discount, sorry. That is their (YLO's) discount". Hopefully they were using the open market.

Anonymous said... is a company that is worth looking at if you want to set up dividend portfolio - drips fractional shares to the 4th decimal plus a flat fee of $40 to set up any size portfolio, or 9.95 per company (buy or sell). Many companies available and some ETFs. You have to track your own ACB.


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