Tag Archives: InvestorLine

Can You Buy Additional Shares for No Fee Using a BMO InvestorLine DRIP?

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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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If I Use an InvestorLine DRIP Will I Get the Discounted Price for Reinvesting in Shares?

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A common benefit of Dividend Re-investment Plans, DRIPs, is that you may be able to buy additional shares in a company at a discounted price with your dividend payment. This type of discount is available to registered shareholders who are direct participants in dividend reinvestment plans and it may also be available to non-registered share owners who participate in a DRIP through an intermediary such as a discount brokerage.

Written: 2014
Reviewed: 2023

For example, in 2013, if you reinvest your dividends from Fortis through a DRIP, you are entitled to purchase your shares at a 2% discount on the market price if Fortis issues new shares to participants in its DRIP plan. (Fortis can elect to simply buy shares at the market price to reinvest dividends. If it buys the shares, it does not provide a discount.)

So if I owned shares in Fortis that were registered in my own name, I could register for a DRIP for them with ComputerShare, the plan agent for Fortis.

However, what if I hold the shares in Fortis through my online discount broker, BMO InvestorLine? In that case, the shares are not registered in my own name. BMO is my agent.

I know that I can register my shares for a synthetic DRIP with InvestorLine. What I didn’t know was whether I would also be eligible for any discount offered by Fortis for reinvesting dividends in shares. So I sent a query through MyLink, InvestorLine’s secure email program, to ask.

The InvestorLine MyLink representative replied, “You will receive the same discount on the DRIP program through us. It will be reflected on the DRIP price and pass through to you.”

In other words, if Fortis is not offering a discount, perhaps because it is buying shares from the market to meet the dividend reinvestment need, then the InvestorLine synthetic DRIP will also not offer a discount. If Fortis is offering a discount, most probably because it is issuing new shares to meet the dividend reinvestment need, then the InvestorLine synthetic DRIP will match the discount.

Key Differences Between the InvestorLine DRIP and a Direct DRIP

If you are the registered owner on record of Fortis stock, and you enroll directly in their DRIP with ComputerShare, you can buy fractional shares of the stock with your dividends.
If you use BMO as your agent and you are not the registered owner on record for the stock, and if you enroll in the synthetic DRIP through InvestorLine, you will not be able to buy fractional shares of the stock. Instead, your dividend payment will be used to buy as many full shares as possible, and the remaining dollars will be paid into your InvestorLine account as cash.

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