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Is ComputerShare a Legitimate and Safe Company? Is ComputerShare a Scam? ComputerShare BBB Rating.



About ComputerShare


Founded in 1978 and listed on the Australian Securities Exchange since 1994, Computershare employs over 15,000 people across the globe, providing services in over 20 countries to more than 16,000 clients.

Publicly traded companies hire ComputerShare to manage employee stock plans, trusts, stock transfers, shareholder meetings, and other corporate services. Coinciding with that is the individual investor sides of those services where they help individuals dispose of stocks held via physical certificates, participate in DRIPs (Dividend Reinvestment Plans) and DSPPs (Direct Stock Purchase Plans), receive dividend payments through direct deposit, and transfer stocks to different accounts or individuals.

ComputerShare's businesses include Investor Services, Equity Compensation plan administration, proxy solicitation, communications, and other lesser services. For the purposes of this article, only Investor Services will be discussed.


Is ComputerShare Legitimate?


Is ComputerShare Safe and Legitimate Firm?


The answer to this question is yes. ComputerShare provides a unique service to investors, that of consolidating all the various chores of investing: tracking, record keeping, paying dividends, investor communications like annual reports, proxy statements, prospectuses, research, buying and selling, and more.

Opening an account on their website is not easy and requires thorough identity verification. Judging by the "Terms and Conditions" policy an individual is required to agree to before opening an account, cyber security is a high priority. ComputerShare appears to offer a safe and secure website.

The main service offered to individual investors can be found on the Buy Stock Direct page. This service allows individuals to buy stock in hundreds of publicly traded companies, including many foreign stocks through American Depositary Receipts (ADRs). A large number of closed-end mutual funds are offered as well.

Stocks can be purchased through either DSPPs or DRIPs. Minimum investment amounts range from $0 to $500 depending on the stock being purchased. Most companies require only a one share minimum purchase by existing account holders.

Each stock has a Plan Summary that details the various requirements, transaction fees, and other fees. Investors should be aware that with these types of stock purchases, orders are not necessarily executed immediately or even the same day. Often, ComputerShare reserves the right to group together several buy or sell orders of the same stock and submit the grouped orders as a single transaction. This is definitely not a broker suited for active trading.


Is ComputerShare a Scam?


Scam is a loaded term because one person's cry of "scam" is another person's claim of "buyers beware." Unscrupulous people are found in all businesses, and scams are certainly more prevalent where large sums of money are involved such as investing.

A perusal of several consumer complaint-oriented websites shows that ComputerShare has a fair number of detractors. Many complaints can usually be dismissed as a buyer venting after losing money due to greed or ignorance of the risks involved with a particular investment. However, complaints about slow or inept customer service and onerous bureaucracy were numerous enough to raise a caution flag.

Claims of high transaction costs in disposing of shares was another valid issue, since investors have many inexpensive online brokers to choose from that compete with ComputerShare. However, in checking several of the investment plans and options that are offered by companies listed on ComputerShare, it's clear that each company has different requirements and fees for buying or selling shares.

For example, Proctor and Gamble (PG) charges an initial setup fee of $10, a cash purchase fee of $6, and an ongoing investment fee of $3. PG requires a $500 minimum purchase to open an account and a $100 minimum or ongoing automatic investment for existing accounts. In contrast, Exxon Mobil (XOM) charges $0 for any purchase, and has minimum investments for new and existing accounts of $250 and $50, respectively. Some companies may allow IRA accounts or other fiduciary accounts; others don't. Some companies allow DRIPs; other companies don't. Therefore, investors must understand the policies and fees charged by each company listed on ComputerShare's Buy Direct webpage.

With all the above in mind, we are 100% confident to say that ComputerShare is not a scam.


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ComputerShare BBB (Better Business Bureau) Rating


ComputerShare Better Business Bureau (BBB) rating has a perfect A+ score. You can see the ComputerShare BBB information under this link.

In the past 3 years, 88 complaints against ComputerShare have been closed with the BBB. Here's the breakdown:

Advertising/Sales Issues - 2
Billing/Collection Issues - 3
Delivery Issues - 13
Problems with Product/Service - 70
Guarantee/Warranty issues - 0

According to the BBB, ComputerShare has received an average customer review rating of 3.78 stars out of 5 stars based on 20 Better Business Bureau Customer Reviews.


Is ComputerShare Safe?


Are Your Money and Investments Insured?


The quick answer is no, because investments serviced by ComputerShare are not insured by the FDIC. ComputerShare is a stock brokerage that administers transactions of shares of publicly traded companies along with a number of closed-end mutual funds. The SEC and SIPC regulate individual stocks and mutual funds. However, ComputerShare has obtained an exemption from the SEC regarding registering as a broker since they are merely acting as transfer agents to the individual companies for which they administer their stock purchase plans. In other words, it's safe to do business with ComputerShare because the SEC, which regulates their member companies, indirectly protects them.


ComputerShare Review


You can read a detailed review of the firm, containing pros and cons of having an account there in our ComputerShare review »


Is ComputerShare Scam Conclusion


ComputerShare is a legitimate business and not a scam. Its products, equity investments, are not insured since all stocks have risks of principal loss. However, investing through ComputerShare is not for everyone because they deal with a limited number of companies that each sets its own restrictions and fees. ComputerShare doesn't execute trades immediately or even as fast as possible, since they often combine orders from multiple customers, which may be executed days later. Active traders or traders of large share lots or dollar amounts are better advised to use a regular online broker.

ComputerShare may work best for employees of a company whose stock they administer and investors seeking low-cost or no-cost DRIPs in which to participate.