How to Get Paper Stock Certificates for FreeMay 2, 2020
With the decreasing demand for stock certificates there have been more and more restrictions on receiving paper stock certificates. Although difficult and time consuming do not let the complexities stand in front of you getting your certificates. Despite difficulties, in most cases, retrieve decorated paper stock certificates for free. There a are a few people to call that will land you owning the paper copy of your shares and not have to pay for it. In this article we have outlined the steps to receive paper stock certificates for free, or close to free depending on your broker fees.
Your first step will be to retrieve the transfer agent contact information for your company. A transfer agent is the firm a company hires to track its shareholders and handle share processing. When a company goes through any number of share reorganization as in splits, reverse-splits, acquisitions etc. the transfer agent would handle the share processing. Most large companies hire one of several large transfer agents including BNY Mellon or Computershare. Some companies process in-house and serve as their own transfer agent.
The easiest way to get name of a transfer agent is by looking at the company’s annual report. You can access the annual report from most companies’ websites. You can also download the annual report, as filed to regulators, from the Securities and Exchange Commission’s website. You may also do a business entity search in the state the company was incorporated in. State’s hold company and transfer agent contact information for every company incorporated within it’s laws. SEC States offers links to all state business searches, a link to their site can be found in the resources section beneath the article. Once you have secured the transfer agent information you may proceed.
The next step is to contact the number we have procured and confirm with them that the company provides paper certificates. You are only eligible to receive paper copies of your positions if the said company provides them. Most companies still provide paper certificates as they have historically, although a staggering trend of large companies currently do not distribute stock certificates, including Sears, Visa and Intel. These companies still remain strongly in the minority, less than 5% of companies do not provide paper certificates. If you are among the unlucky shareholders in one of these companies your are unfortunately out of luck, there are no alternative ways to receive paper copies of your share ownership.
The next step is to make sure that your shares are directly held in your name with the transfer agent. If you own stocks through an online brokerage, the shares are technically listed under broker’s name, not under yours. The brokerage firm then tracks your ownership, the system is widely adopted and does not cause any ownership issues in most cases. The arrangement where the broker holds the shares is commonly referred to as “street name” registration.
You will only be able to get paper stock certificates if the shares are held under your name and listed with the transfer agent. You need to instruct your online brokerage firm/stock broker to transfer the shares to direct registration with the transfer agent. Some brokers may charge for doing this, while some others may not. In the end the shares will be held in your name and the transfer agent will recognize that you are the owner.
Once your shares are listed directly under your name with the transfer agent, you can make a request with the transfer agent. You’ll need to get in contact with the transfer agent again and request paper certificates. Two of the largest firms both BNY Mellon and Computershare do not charge to issue certificates.
While paper certificates have allure for some investors as they are iconic in there history and stigma. In the same paper certificates also offer convenience and safety in holding the actual shares, there are sizable disadvantages to be mentioned.
First, you’re responsible for safeguarding the certificates. If you lose a paper certificate it is a costly and involved process to replace your certificates. Next, managing a portfolio with paper stock certificates is cumbersome at best. With the modernisation of markets stock certificates are painfully behind. You’ll need to make sure the transfer agent is aware of your holdings and is up to date with your current address to make sure you receive dividend checks. Your broker will no longer handle address changes when it comes to your paper certificate holdings, essentially all dealings will be with the transfer agent. Even more so than the last point when you move your ownership to the transfer agent, your stock position will no longer be listed at your broker’s website. Which of course carries with it many disadvantages.
Finally, when you at last receive your paper certificates dealing with delays should be expected in many circumstances most painfully when attempting to sell one’s shares. You’ll need to mail the certificates when you want to sell stock. In the world in buying and selling within milliseconds the paper stock certificate is quickly vanishing. Expect the steps to maintaining your paper stock certificates to become increasingly time consuming as resources disappear. And that’s not to say that your company is one of the few that does not deal with certificates anymore or will become one of them.
All of these reasons make it disfavoured to own paper stock certificates, most investment advisers strongly discourage investors to directly hold paper certificates. Although if regardless of the disadvantages and complexities listed above stock certificates are still what you need, the steps have been outlined to obtain them at no charge.
Resources: Secretary of State Business Entity Search for all States | SEC States