Is ComputerShare a brokerage firm? ComputerShare review: transfer agent stock buying fees schedule, pros, cons, and features.
Bottom Line Up Front
The emergence of tech-enabled stock trading makes the old methods seem prehistoric. The days of calling in stock orders to an agent (on a landline!) or checking the market closing price in the next day’s newspaper are behind us.
Some holdover services still exist, and ComputerShare is one of the few remaining legacy services. ComputerShare offers stock transfer agent services to investors and companies, and lets investors purchase stock directly from a firm.
Our ComputerShare review looks at whether the service may be helpful for today’s investors.
What is ComputerShare?
ComputerShare was one of the first companies to offer direct investing for the Average Joe. Instead of calling a broker or representative, ComputerShare connected you directly with the company, and they maintain that legacy today.
Founded in 1978, ComputerShare is based in Australia but employs over 15,000 personnel globally. ComputerShare services over 16,000 company or institutional clients in more than 20 countries. Through the core business and subsidiaries, ComputerShare offers services to investors and companies that include:
- BoardWorks, a portal for corporate boards and directors to share information quickly and securely.
- GEMS, a compliance tool to help companies meet regulations and requirements.
- Section 16 Manager, which assists in filing SEC-required documents.
- Municipal and corporate debt management.
- Employee equity planning.
- International stock listing.
- Direct investing services.
Our review will focus on ComputerShare’s individual investing services, but rest assured – ComputerShare is trusted to manage innumerable corporate financial actions, so trusting them with your money is a safe bet (see Is ComputerShare safe? article).
Is Computershare a Broker?
One of the primary misconceptions new investors have about ComputerShare is assuming that it acts as a brokerage like Charles Schwab or Robinhood.
This isn’t the case. Computershare is not a brokerage.
Instead, ComputerShare is a stock transfer agent. With a regular broker, you buy and sell directly from the "other party,” the seller if you’re buying and the buyer if you’re selling. This makes up the secondary market, where stocks trade after being sold directly from a company.
Stock transfer agents are a step ahead of the secondary markets. Instead, they act as a matchmaker between you and the company you’re buying stock in. This is a Direct Stock Purchase Plan (DSPP) and is ComputerShare’s primary investor resource.
See Transfer agent vs broker article for more info.
Navigating ComputerShare & Research Tools
If it’s your first time using ComputerShare, be ready for a long process to open an account. Since ComputerShare takes digital security seriously, opening a new account is a thorough procedure that requires direct identity verification.
Once you’re inside, though, ComputerShare makes navigating the most common investor resources easy.
Even within your account’s Investor Center, the most common account management tools are highlighted front and center to ensure you can find what you need quickly.
In addition to direct stock purchase, which we’ll dive into in the next section, ComputerShare offers a research center to help you gather information before buying a stock. We’ll look at how researching a company works on ComputerShare, and how it compares to other sites.
First, you enter the ticker or company name you’re researching. We’ll use Apple (AAPL) for our research.
Once on the company research page, you can see market information and a company overview. The market information includes the basics of stock qualities – price/earnings ratio, high and low prices, and other data points. This page also provides news and a chart of AAPL’s historical stock price.
Is ComputerShare’s research center suitable for investors? It’s fine. It is tailored toward more experienced investors who already understand P/E ratios, market cap, and other data. But, for those more experienced investors, a lot of helpful stock information is missing, like beta, volatility, and other company financial ratios.
It isn’t a good research resource for beginners. There isn’t much explanation or detail, and you need to know about the stock beforehand to see if it’s a good buy from the information ComputerShare gives you.
Overall? Their research center is OK if you want to check the current price before you buy. Still, many fantastic stock research websites are available for experienced and new investors – it’s better to find one of these instead of relying on ComputerShare.
ComputerShare Investment Options
If its stock sold directly from a company, you can buy it on ComputerShare… only if ComputerShare is that company’s registered stock transfer agent. If it’s anything else, like options, ETFs, or crypto – you can’t. If ComputerShare isn’t the company’s transfer agent, or their contract doesn’t allow it, you can’t buy shares.
Remember, ComputerShare links you directly to the company selling the stock. They’re one of the only remaining stock transfer agents in the game. If you check any publicly-traded company’s Investor Relations page, chances are that they’ll list ComputerShare as their agent. Here’s an example from Apple:
How easy is it to buy stock on ComputerShare? In short, not that difficult – but not as easy as most brokerages. You’ll start on their main company page:
We’ll look at Coca-Cola this time. When you enter the company name, you’re given a choice of “one-time” or “recurring” investment. And, note the minimum – since this is a direct interaction from the company, many will require a minimum transaction amount to make sure it’s worth their costs to execute the transaction. In this case, Coca-Cola requires a minimum $500 initial investment.
From this point, ComputerShare processes your request and executes the transfer on behalf of Coca-Cola. Another note – since you’re buying directly from a company, it will not be instantaneous. This is different from brokerage transactions on the 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. If you’re an active trader, ComputerShare is not for you.
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 from dividends.
ComputerShare Pricing & Fees
This is ComputerShare’s biggest downside. Transaction costs at ComputerShare are high because a direct, human interface between investor and public company is cost and labor-intensive compared to lightning-fast digital transacting. Some of these requirements are also set by the companies and just collected by ComputerShare.
This also means that fees might vary based on the company you’re buying stock in. Let’s look at one example fee schedule that’s standard for most transactions:
- Account setup: $0
- Purchase fee: $15 per transaction, plus $.03 per share
- Selling fee: $25 per transaction, plus $.04 per share
- Wire transfer fee: $25
As you can see, buying and selling stock can get expensive quickly. A transaction for 100 shares would cost $18, so if you’re a small account investor or want to trade actively, ComputerShare isn’t the best option.
Find a Financial Advisor
If you are looking for a professional money management service in your area, you can find a Financial Advisor on the Wiser Advisor(or read Wiser Advisor review).
ComputerShare’s Complaints
A web search will find a common thread among complaints about ComputerShare – managing deceased persons’ accounts. Since ComputerShare has been around for so long and was originally one of the only companies to “hold” stock on behalf of investors, many older people have stock “held” by or in a ComputerShare account.
Transferring those shares or liquidating the account can be challenging when people die. It isn’t all ComputerShare’s fault since it’s a legal process, but I can attest that they did not make it easy, and customer service left much to be desired.
I had a family member die, and he had around $500 worth of Home Depot stock managed by a ComputerShare account. These are the documents I had to gather and mail (not email or upload) to ComputerShare:
- Notarized will showing that I was the executor of the estate.
- Notarized declaration of transmission, which says you intend to transfer the shares to someone else.
- Notarized long-form death certificate.
- Power of attorney.
- Name/address of the recipient.
And here’s the kicker – since ComputerShare is the administrative manager for the account and doesn’t “hold” the shares traditionally, I had to find and gather physical stock certificates with the original owner’s name on them.
It was a long process, and the phone assistance from ComputerShare representatives wasn’t much help. It worked out eventually, but patience is vital if this happens to you.
ComputerShare Review Conclusion
Honestly, ComputerShare is only a good option for a select investor class. If you want to buy a particular stock that issues dividends, have a lot of starting cash to buy a large 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.
The fees make ComputerShare a tough pill to swallow, and the many actual brokerages with low- and no-commission trades are much more accessible to most investors. They also offer a more extensive set of education and research products.
In the end, most investors are better off selecting a brokerage like Charles Schwab or Robinhood. If you’re in the small, select class that ComputerShare could serve – go for it. They’re reliable and good at managing their areas of expertise… but those areas don’t appeal to most investors.
Updated on 7/2/2024.
About the Author
Arthur Chachuna is a professional personal finance blogger, and the owner of Brokerage-Review.com. He has been an avid investor for 25 years, and has a background in both applied math and programming.
