[Resolved] Entering DRP after Dividend Has Been Paid (but not Received)

mad__llama on 12/10/2021 - 16:23
Last edited 12/10/2021 - 17:00

Quick question that hopefully someone can answer.

Long story short: I thought I'd entered into the offered DRP after a share purchase but in fact I didn't complete the DRP application. Only realised this after no new DRP shares were issued to me following dividend payment. I have now properly entered the DRP but obviously too late for this round of dividends.

I also did not provide banking details to Computershare (assuming that I had entered into the DRP).

Now I have a "paid" but "uncollected" dividend amount - if I don't provide bank details and get that amount paid to me, will it get combined with the next dividend to purchase DRP shares or will it just sit with Computershare (until I give them my bank details)?

Financial

Comments

  • Donaldhump on 12/10/2021 - 16:29
    +2

    ring up computershare and ask them

  • No Username on 12/10/2021 - 16:35
    +2

    Had this happen to me before. Not sure if it was with Computershare but I was sent a check.

  • Seraphin7 on 12/10/2021 - 16:37
    +4

    Now I have a "paid" but "uncollected" dividend amount - if I don't provide bank details and get that amount paid to me, will it get combined with the next dividend to purchase DRP shares or will it just sit with Computershare (until I give them my bank details)?

    The DRP for the most recent dividend is passed. One way or another, that uncollected dividend will not be buying shares via DRP. Waiting for the next dividend will see that amount continue to sit there as uncollected with only that next dividend payable applied to the DRP.

    • mad__llama on 12/10/2021 - 16:59
      +1

      Great, then I won't leave it sitting there :)
      Cheers!

    • brad1-8tsi on 12/10/2021 - 17:37
      -3

      seraphin, that is incorrect. Do you have any experience in how DRP works? Some folk have multiple distributions held because the distribution amount isn't enough to buy a single share.

      OP: Why do you want DRP? How many shares would you get based on your current holding, the last dividend and the share price?

      DRP sucks.

      1 share requires as much admin as 1000.

      You need to keep accurate multiple cost base records for when you sell.

      You have no control over the DRP price which can be above the share price on the day of issue. (eg: Wesfarmers at the last dividend.)

      • Seraphin7 on 12/10/2021 - 17:54
        +3

        Yes, I have extensive experience in DRPs and have encountered precisely the situation OP has been faced with. It is with that knowledge that I have made the above post.

        We're not talking about a residual amount due to it not being enough to buy a whole share. The issue here is that OP wasn't registered for the DRP at the relevant time relating to the most recent DRP purchase and therefore those monies will not be applied to the DRP.

        On your other points, the cost base information is available from the share registry. You do not necessarily have to keep spreadsheets or similar of this information. Regarding the purchase price of the DRP, yes you are a price taker that may be immediately disadvantageous, but this is at least partially offset by the fact the DRP doesn't incur brokerage on the purchase. The idea behind the DRP is to accumulate a position over time by gradually having those dividends build the capital base that is working for you.

        Obviously a DRP strategy is not going to be universally the best way to go, but for investors that are happy to quietly increase their exposure to stocks they already own, it can be a very effective way of slowly building a capital base to increase the absolute returns earned over time.

        • brad1-8tsi on 12/10/2021 - 20:46
          -4

          BS, BS and more BS

          • Devils Advocate on 12/10/2021 - 22:11
            +1

            @brad1-8tsi: I also have a lot of experience with DRPs, personally and with my work. Seraphin is spot on, you are incorrect sorry Brad.

            The issue that you talk about only applies to residual dividends when DRP was elected but there wasn't enough to buy an extra unit.

    • cloudy on 12/10/2021 - 21:52

      Are you sure it sits there uncollected??

      i used to collect cheques when i forgot to put in my bank account details.

  • SmiTTy on 12/10/2021 - 19:33
    +1

    You should be issued a cheque.
    You can always have it reissued by logging into computershare

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