Minimising brokerage

[hiflo]

Hi,

I have just started to purchase my shares and heard that there are ways that you can purchase shares directly if you are already in possession of share in the US.

Is there are similar system in Australia because I would like to further purchase shares in a company that I hold shares to without paying full brokerage.

 

[suhm]

Hiflo a good way to avoid the brokerage fees are to participate in the dividend reinvestment programs that a lot of companies offer these days and are especially good if you will be a long term holder of those shares. These days however the discount to which these shares are allocated compared to the market price is minimal to nil so there is a larger chance that they might be overpriced but it averages out over the long term.

Hope that helps,
suhm

Edit. p.s. no brokerage is paid for shares purchased under a drp plan but you have to keep the records of what price the shares were acquired for CGT purposes and the residual amount of money is held over until the next dividend usually only a couple of dollars at most.

 

[hiflo]

Thanks for the info.

I am already doing that with a couple of the shares that I am holding for long term. That sure saves me $30.00 odd dollars to buy/sell a few shares.

But was just wondering once you are registered with the company as shareholder whether you can buy direct from the company without incurring brokerage.

 

[bullmarket]

Hi hiflo

Hi,

I have just started to purchase my shares and heard that there are ways that you can purchase shares directly if you are already in possession of share in the US.

Is there are similar system in Australia because I would like to further purchase shares in a company that I hold shares to without paying full brokerage.

I'm not aware of any way to buy additional shares directly from a company in Australia without incurring brokerage apart from DRP's as mentioned by suhm earlier or via rights issues if you take them up directly and not buy the rights on market as you can with renounceable rights or some other situation where the company issues new shares to raise capital (placements etc).

cheers

bullmarket

 

[Mouse]

Hi Hiflo,

I read in an American book about buying shares directly from the company therefore avoiding brokerage a few months ago. It sounded good to me so I checked it out with the ASX and over here you can only buy shares via a broker, not direct from the Company.

cheers
Mouse

 

[RodC]

Occasionally some companies (not many) on the ASX will offer a top-up scheme in addition to their DRP's and Bonus plans.

This allows a purchase of shares direct from the company in order to bring the DRP shares up to a set amount.

I have done this in the past, but it sames to be pretty rare (and I can't remember off the top of my head which company it was).

Rod.

 

[bullmarket]

Hi RodC

Occasionally some companies (not many) on the ASX will offer a top-up scheme in addition to their DRP's and Bonus plans.

This allows a purchase of shares direct from the company in order to bring the DRP shares up to a set amount.

I have done this in the past, but it sames to be pretty rare (and I can't remember off the top of my head which company it was).

Rod.

yes good point - that rings a bell with me now as well.

Energy Developments (ENE) is one company that used to offer annually the option to buy additional shares up to the value of $5000.00 (from memory) from them without brokerage and at a very minimal discount to the market price.

From memory the offer was made at about the time of the final dividend payments but I don't know if they still offer that option.

cheers

bullmarket

 

[RodC]

Yes, it could have been ENE - did have some of them at one stage.

Rod.

 

[hypnotic]

Yes, it could have been ENE - did have some of them at one stage.

Rod.

Hey all,

Yes it was definitely ENE which offered $5000 worth of shares with no brokerage fees, BUT for exisiting ENE share holders. (I bought some myself). Yes and they also have a reinvestment plan where they gave you extra shares instead of cash at a discounted rate and no brokerage.

I am not sure if any other company offer such deals

Cheers,

Hypnotic

 

[RodC]

Downer EDI (DOW) have a share purchase plan open at the moment, minimum $1000, max $5000 for existing shareholders.

Closes May 19 (record date was April 19).

Rod.

 

[Julia]

I've participated in similar scheme with CBA and, I think, BBI.
Doesn't happen often though.

Julia

 

[bvbfan]

Just a note some may need to consider when thinking about DRP's

Each allotment under a DRP is effectively a purchase at the the reinvestment price and date. Now when you sell the shares you need to consider that each allotment of shares is a different purchase. This can get complicated with holdings over long time frames (eg bank shares) and may end up costing you money when you end up doing your taxes (if you pay someone else to do it for you)

 

[twojacks28]

also another way is if you buy a lot of shares like $10 of thousands worth then u can negotiate with the broker. and if they say no then u got to another there is always someone who will do it. most times they accept the offer