Degiro observation + companies allowing direct share purchase

H

haroldsxxx

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Have a Degiro a/c with over 40k across 9 stocks. I like the platform and low fees but am minded not to increase my exposure given that the Dutch supervisory agency only covers up to 20k per account. I have tried to find more details about Degiro but such reporting as I have found tends only to show how fast the company is growing and how many new a/cs they have opened in last six months. The reassurances that the company itself offers regarding segregation of client a/cs I am inclined to discount as the type of thing that a fast growing super discount broker would say ... I can find no independent verification.

Do any AAMers have links of a regulatory supervisor that would reassure a Degiro a/c holder?

Wanting to purchase more shares but not increase my Degiro exposure - or pay exorbitant Irish broker fees - I have come across the fact that many large US companies - Coca Cola, Walmart for eg. - allow direct share purchases. L'Oreal in France offers the same possibility. In most cases, the commissions seem to be very low and the schemes allow regular feeds of small amounts, ie. deliberately tailored to small scale retail investors.

Has any AAMer experience of direct share purchase? Are there many FTSE, ISEQ or EUStoxx50 companies that have such schemes?

Tks, Harold
 
Oh very interested in this Harold. Can you post links to how one purchases stock in the shares you mentioned?
 
Tried inserting links but prevented from doing so. Google 'Coca Cola direct share purchase' or 'L'Oreal shareholder reasons to invest' to see examples of schemes. For Coca Cola, Computershare US administer the 'direct share purchase' scheme.

For L'Oreal, there is an additional 10% dividend bonus for those retaining shares for more than two years as a 'registered shareholder'.

Seems to be more of a US thing in general though.

For some of the disadvantages, google 'disadvantages direct stock purchase plans'.

From my point of view, the biggest advantage is security. Having an investment with a broker - unless it is a CREST a/c - adds another layer of insecurity to your investment.
 
Thank you. I’m interested in this too for similar reasons. My dad held shares directly over the years, albeit directly purchased through brokers. Then brokers changed their model to get a revenue cut for simply holding so this service is undesirable to them and they’ve moved away from it. I’ve a few hundred euro in shares in Coca Cola held in DeGiro, but I’d been considering LOreal so that they do it is interesting.
 
haroldsxxx said:
Have a Degiro a/c with over 40k across 9 stocks. I like the platform and low fees but am minded not to increase my exposure given that the Dutch supervisory agency only covers up to 20k per account.
Click to expand...

Diversify execution only brokers. I split part of my savings between ig.com, degiro, interactiveinvestor.ie and (next in the queue) there will be trading212.
 
It's a real shame the likes of DeGiro don't give you the option to hold shares in your CREST account. I can understand that they wouldn't want to do it for those regularly trading, but I wonder could they not allow you to nominate certain purchases (that you don't intend to trade) to go into your CREST account instead and maybe you pay a small admin fee to do so.

Campbell O'Connor is still my fallback position to putting buy&hold shares into CREST, but it is sorely tempting to use DeGiro when you see the difference in fees. Maybe the trick is telling yourself that the extra 1-1.5% you pay to get your shares into CREST is a form of insurance. It probably wouldn't feel like expensive insurance if DeGiro wound-up some day either...
 
Unless I am missing something, why don't you just open a custody account with DeGiro:

Custody

A Custody profile is different from a Basic profile in that the securities are held separately from the lending pool of DEGIRO clients’ securities and are thus unable to be loaned to third parties. Debit Money, Debit Securities, and Derivative trading is not available with a Custody profile and you cannot change to an Active, Trader, or Day Trader account. A Custody Profile has different conditions and fees. However you will still benefit from our low transaction costs and save money through trading with DEGIRO.

At DEGIRO you can rest assured that your investments are held securely. DEGIRO uses a separate custodian entity to hold your assets, this means they are completely segregated from the assets of DEGIRO. The sole task of the custodian entity is to administer and safeguard your investments. By law it cannot perform any commercial activities. In the unlikely event that something is to happen to DEGIRO, your investments will not be treated as recoverable assets to DEGIRO's creditors, but will remain in the safeguarding of the custodian entity.

This means that if you have a custody account, the 20k protection is only relevant for money that you haven't invested yet.
 
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