Is ComputerShare a Broker? (2024) (2024)

How does ComputerShare work? How does ComputerShare make money? Why use and what companies use ComputerShare?

ComputerShare overview

In the age of digitized, lightning-fast stock transactions that make the speedy day traders of the 2000s seem glacial by comparison, stock transacting directly with public companies through middlemen seems an anachronism. The process is notoriously slow, and the secondary markets are fully liquid – why risk mispricing or missing out on a deal by waiting up to 24 hours for a stock purchase to settle?

This is called direct stock ownership, and a particular class of investors keeps the industry in business. The undisputed leader in that industry is ComputerShare.

Is Computershare a broker?

ComputerShare is not a brokerage enabling access to trading on secondary markets; instead, ComputerShare is a stock transfer agent that allows the direct stock ownership we discussed. At its most basic, a stock transfer agent is an in-between or middleman for investors and firms issuing public equity or stocks.

Companies must enroll to offer direct stock ownership through ComputerShare, so stock availability depends upon opt-in.

How does ComputerShare work?

In a nutshell, you generate a ticket to buy stock from a firm through ComputerShare. From there, ComputerShare processes your request and executes the purchase. Remember that it will not be instantaneous since you’re buying directly from a company. This is different from typical brokerage transactions on a secondary market.

Communicating constantly between an investor and company would be time-consuming and costly (also hence the minimum transaction amount), especially for many small orders. If it is a small order, it will likely be bundled with several others and submitted as a single transaction.

ComputerShare, as a transfer agent, also acts on behalf of dividend-issuing companies. This means that if a company gives earnings back to shareholders as a dividend, ComputerShare will take the money from the company and ensure it goes back to you. ComputerShare also enables a dividend reinvesting plan (DRIP). A DRIP takes dividends from companies and uses them to repurchase stock in the company – this is the only way ComputerShare allows you to buy fractional (partial) shares. Still, it can be an excellent way to keep growing your money through dividends and income investing.

How does ComputerShare make money?

ComputerShare makes money through client relationships with publicly-traded companies, but their investor-based income is through a hefty fee schedule. This is surprising to many investors in the age of low and no-fee transactions through brokerages.

But, since ComputerShare acts as an intermediary between investor and company rather than a brokerage, ComputerShare can make a mint off of its fees.

The complete fee breakdown is extensive, but nearly all investors can expect to pay:

$25 wire transfer fee for account funding.
A $15 flat transaction fee for all purchases and an additional $.03 per share purchased.
When selling, another $25 per transaction and $.04 per share.

The fees also make active trading nearly impossible, so ComputerShare is best for higher-net-worth individuals who want to buy and hold individual stocks over a long period.

Why use ComputerShare?

ComputerShare is, frankly, only useful for a particular class of investors. If you want to buy a specific stock that issues dividends, have a lot of starting cash to buy a significant position, and not think about it for years, then ComputerShare might be for you. If you’re a small account, want to trade actively, or want access to the full suite of investments like ETFs and options, then ComputerShare is not for you.

Another frequent use of ComputerShare is liquidating deceased persons’ accounts. Since older Americans couldn’t access today’s digital brokerages, ComputerShare was the only option to invest in stocks. The process of liquidating accounts with ComputerShare is long and complex, so many elect to retain the shares under the ComputerShare account and transfer ownership. This also may help avoid tax liability from capital gains.

Best ComputerShare alternatives

Broker Review	Stock/ETF Fee	Mutual Fund Fee	Option	Promotion Offer
Robinhood	$0	na	$0	Up to $12,000 transfer bonus or up to $200 free stock + 1% IRA match at Robinhood.
Firstrade	$0	$0	$0	Earn up to $5,000 cash bonus & get transfer fee reimbursem*nt.
Charles Schwab	$0	$49.95 ($0 to sell)	$0.65 per contract	Satisfaction guarantee and $0-fee trades at Charles Schwab.

What companies use ComputerShare?

Many companies use ComputerShare’s services. ComputerShare offers direct stock ownership enrollment and provides a suite of assistance to firms with managing the regulatory requirements and intricacies of being publicly traded.

Remember, you can only trade stock for firms enrolled with ComputerShare as a stock transfer agent, but you can check the complete list on ComputerShare’s site. This information is available without creating an account.

You can also find out if the company you’re interested in is enrolled with ComputerShare by contacting their investor relations. Many firms also list the information directly under their investor relations information pages, like McDonald’s does below. This negates the need to call or email firms to find out if you can transact a direct stock purchase for their stock through ComputerShare.