I purchased a very small parcel of AFI and WHF the other day through Interactive Brokers - I thought that I'd buy a small parcel and get the AFI DSSP and WHF BSP functionality set up so that I could be sure that this all worked prior to plunging the house (so to speak).... After my purchase I then went to the AFI website and they have a form that has to be filled out to elect participation in the DSSP (http://www.afi.com.au/media/scripts/doc_download.aspx?did=258). As part of this I have to provide the HIN/SRN number...when I asked Interactive Brokers for this, this was their reply: "We hold all assets under a custodial structure which are registered under IB's name at one omnibus account with our custodian, BNP Australia. Hence, we do not provide individual registration of holdings (i.e. there is no unique HIN for your account U7836187). Please note IBKR only supports cash dividends option and dividends that have been announced for eligible shares will be automatically credited to your IB account on the payment date so you do not need to complete the dividend forms." As the shares are held in a custodial structure - I am taking on Interactive Brokers credit risk. Are there other brokers out there where the shares would be held in my name, under a unique HIN/SRN - ie if the broker goes belly up I don't lose my shares? I luckily dodged a bullet back in 2007, I had a big margin loan approved with OpesPrime and never drew down on it (nor had any shares lodged with them) and they went broke!!!!! Any pointers would be much appreciated. Thanks Nick
I know Commsec and most of the main brokers use HIN's and shares are held in your entities name. They are more expensive but I was not comfortable either, like you, with the custodian model (I had IG markets - same deal). There is not much risk but I was not happy with the cost/risk trade off. If your want to trade international shares though Commsec it has the same system with a custodian setup through Pershing. As I will hold a few shares this way I am happy with that risk but not with my main portfolio. Worked too damn long and hard to expose it, even in a small way. It's like insurance. Little extra cost now to save a catastrophic event. But its personal choice and sleep at night factor in the end. BTW, just after I chose this way Halifax went belly up confirming my fears. Now the punters are chasing their money and will not get it all back. Investing is hard enough not to lose capital. https://www.smh.com.au/business/mar...m-thousands-of-investors-20190111-p50qr8.html
When I looked at this exact concern about seven years ago I came away satisfied that it was ok with IB. I'd do a bit more research, may have changed, but clearly the DRP is not an option here
