Stock Certificates

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Jun 9, 2009 7:05 pm

Any good reason to tell clients why they don't need a stock certificate besides the expense?  I can see why people feel more comfortable having the certificate but it's $150 to the client.  It doesn't seem justified but that's the price.

 
Any thoughts?
 
 
Jun 9, 2009 7:37 pm

Bernie Madoff



Thanks to him, more people will prefer the "bird in hand" theory.   

Jun 9, 2009 10:33 pm

Exactly but at a 150 a pop you need to be dropping some pretty big dough in a stock.

Jun 9, 2009 10:34 pm

Sounds like you need to find clients who have real money to invest.

Jun 10, 2009 3:51 pm

BiLO,

They don't need certs because it will make their life easier.  Probably the biggest is if they ever need to be reregistered in any way.  You can easily transfer stocks into a trust or gift them to someone else if they are in street name.  If their spouse passes away you can have their name removed from the registration easily.  It will be much easier on their heirs when they die.  They don't get lost, stolen, or burned in a fire when you hold them.

You might want to talk about SIPC?

Good luck.  I'm too new to have encountered this yet.


Jun 10, 2009 5:01 pm

I agree with everything on this chain but the most recently relevant is Bernie Madoff.  I think because of the lack of credibility or trust that people have of not knowing what we know they feel more comfortable with certificates.  I just tell it like it is and if they want to buy certs that's fine.  One thing I don't get is the cost.  It seems more of a deterrant that justifiabe.

 
Anyway, I was just curious.
 
Thanks
Jun 10, 2009 7:57 pm

In the next few years certificates will be deceased along with the clients who demand them.  NASD about 8 years ago did a study and found that the only people who wanted certificates were older than 60 years of age.  Then they determined these people would pay just about anything to make sure they got a certificate but anyone under 60 years of age wouldn't want one if there was a $5 fee.  At that point they basically did the math and determined in 20 years those wanting certificates will all be gone and to prevent younger investors from joining the ranks of those demanding certs, they allowed everyone to raise the fees.

Jun 11, 2009 1:45 pm

You can have the client hold the certificates at the transfer agent for little or no expense.  It works for some of my older clients who are skittish.

 
IndyEDJ
Jun 11, 2009 3:03 pm

I would agree with Beagle.  When was the last time your client received a certificate for his CD (Certificate of Deposit)?  And, quite frankly, some one who compares me or what I do to the likes of Madoff will never be a client of mine.