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Dear DRIP Investors,


We have been helping people enroll in DRIPs since 1986. Many of our subscribers have written to express their thanks and describe the outcome of their DRIP investments. It has been a source of pride and our great pleasure to have assisted in your efforts to secure financial security.


However, after 35 years we have decided to stop fulfilling orders for enrollments after the March cycle. Moneypaper, via the directinvesting.com website, will continue to provide information about DRIPs and the enrollment process.


As always, good luck,

Vita Nelson

 

About DRIPs (DRIP Learning Center)

How to Enroll in Direct Investment Plans (DRIPs)

Becoming enrolled in a DRIP is a one-time event. The enrollment process can be accomplished in several ways. The easiest way to become enrolled is with the enrollment service offered by Temper of the Times Investor Services, Inc. (Temper Enrollment Service).*

Temper Enrollment Service (TES) accepts orders for up to 16 companies on an order form. Its first step is to act on your behalf to acquire the share or shares that the companies require for you to qualify. The share(s) must be registered in your name. Then it deals with the transfer agent to get your account open. The process takes about four weeks depending on when you send in your order. Once an account is open you will be notified by TES and you will get a statement from the transfer agent showing the share or shares in your account. (Most companies only require ownership of at least a single share.)

The number of shares required to enter as a shareholder is provided under "Search for DRIP." at this site. Most plans require only one share so that means that TES will acquire one share on your behalf so you are qualified to join the plan.

More than one way to join some plans

Every company that offers a plan will open an account for an existing shareholder. However, some plans will also accept enrollment through the company transfer agent from members of the general public who don’t have shareholder status. But these plans, known as direct enrollment plans (DEs), are more likely than shareholder plans to levy fees for ongoing investments. IBM, Mattel, McDonald’s, Disney, and Ford are among the companies that offer DEs that charge fees.

Typically, the fee for each investment through a DE (Transfer Agent) plan is $5, plus commissions! Another negative of DE plans is that, in addition to the enrollment fee, many DE companies require an initial investment of $250-$1,000! For a small investor, having to make such a large initial investment may hurt the diversification of his portfolio. The shareholder plans, on the other hand, generally require only one share to qualify.

Perhaps you are already a shareholder of a company and that company has a DRIP. If your shares are registered in "street name" (held in a brokerage account), the company will not recognize you as a shareholder so you will not qualify to join the plan. In that case, you can ask your broker to get the share(s) reissued in your name. This usually means asking for a certificate, which will incur a cost. Once you have a certificate, you can contact the transfer agent to request a DRIP enrollment form. Generally, you can make your first optional cash investment when you return the form. Companies that offer safekeeping will allow you to deposit the certificate share(s) into your account, but may charge a fee to do so.

How to Use the Temper Enrollment Service to Enroll as a Shareholder

Many investors prefer to use the one-of-a-kind DRIP enrollment service offered by TES. TES sets up DRIP accounts for virtually every company that offers one--including both shareholder-only plans and those that will also allow enrollment through the transfer agent (more than 1,000 companies). It is the only such service available in the world. First, select companies into which you would like to invest. If the company can be obtained through the Temper Enrollment Service, a sign “Order Enrollment in this DRIP” will be displayed under the General Information about the company. Complete the Temper Enrollment Service (TES) Order Form. You can order online or print an order form and send your order through the mail. Your account will be opened on the books of the company with the minimum number of shares required by the plan (usually one share).

The Enrollment Service does all the work: It acquires the share(s) for you to qualify as a shareholder—gets them registered in your name, not “street name;” submits the paperwork to get the account opened; maintains contact with the transfer agent until your share(s) are credited to your new account; and lets you know when you are enrolled in the plan(s). You may order for yourself or as a custodian for a child.

After your Account is Open…

Once you are enrolled in the plan(s), you can make investments directly to your account by tearing off the bottom portion of the statement you receive after each investment or dividend reinvestment.

Many companies allow you to invest through automatic debits from your checking account.

Why would you prefer to use TES to Enroll as a shareholder?

To enroll in a plan through direct enrollment at the transfer agent will likely require an initial investment of $250-$1,000, whereas, if you enter as a shareholder, your initial investment is as little as the cost of a single share. What’s more, aside from the required initial cash investment, it will be your responsibility to deal with the transfer agent for each company and handle all the details until each account is open.

In Summary:

If the company you have decided upon offers direct enrollment through the transfer agent, you can make your first investment through the company transfer agent. There will be a fee for the enrollment service and you will be required to make an initial investment of at least $250 and in some cases, much more than that. That’s to say nothing of the probability of ongoing fees charged by most of the companies that allow direct enrollment through the transfer agent. If you enroll in that same company by using the services of TES, your initial investment will be the cost of the single share of stock but you will still have to pay any ongoing investing or dividend reinvesting fees.

Once you are enrolled in a DRIP, you will be subject to the provisions of the plan, which are set by the specific company. Most plans that require shareholder status don’t charge fees for investing or reinvesting fees (3M, Abbott Labs, AFLAC, Avon, Baker Hughes, ConocoPhillips, Duke Energy to name a few). Most plans that also allow direct enrollment were created by the transfer agents as profit centers and generally charge ongoing investing fees (Disney, Ford, IBM, and McDonald’s for example). Regardless of how you became enrolled, you will be subject to the fee structure of the plan you enter. Investing and dividend reinvesting fees are clearly stated under the "Search for DRIP" link. 

*The Temper Enrollment Service is provided by Temper of the Times Investor Services, Inc., ("Temper") a registered broker dealer, member NASD, SIPC. Temper does not make investment recommendations, nor does it make a market in any securities. Moneypaper Publications, LLC is a financial publisher including Moneypaper’s Guide to Direct Investment Plans. Moneypaper Publications and Temper are affiliated companies.

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