If you participate directly in a DRIP by registering your shares with the Transfer Agent (such as ComputerShare) for the stock, you may be able to purchase additional shares without paying any fee or commission at the time of each dividend reinvestment. For example, at the time this was written, you could purchase additional shares of Fortis. I wondered whether participants in a BMO InvestorLine synthetic DRIP could also purchase more shares when they received their quarterly dividends from Fortis. So I asked, using MyLink the secure email function.
Purchasing Additional Shares through a Genuine DRIP for No Fee
Although there is no discount on the price of shares under any circumstances, it is possible to
buy additional shares in Fortis at the same time as the dividends are being re-invested.
That means additional shares can be purchased four times a year. It’s done by sending a cheque which must arrive at the transfer agent early enough to clear at least three business days before the dividend date. The shares will be purchased at the Average Market Price as defined in the Fortis DRIP agreement.
The financial advantage of making this type of purchase is that no brokerage fee or commission is required to make the purchase. So if it normally costs you $9.95 to purchase shares, you would save that $9.95 fee.
Is It Possible to Purchase Additional Shares through a Synthetic InvestorLine DRIP for No Fee?
Can I buy more shares in Fortis through the InvestorLine synthetic DRIP without paying any brokerage fee? Unfortunately, no.
The MyLink agent responded that, “Regretfully share purchase plans are not available for purchase through BMO InvestorLine.” I guess that’s my regret, not theirs!
So at this point, you are stuck with paying the commission when you want to buy additional shares in the same company. Regretfully.
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Do you participate in a real DRIP and take advantage of the ability to buy additional shares with no fees or commissions? Please share your experiences with a comment.