Wednesday, January 16, 2008

A Good Example

I recently wrote an article detailing some reasons to not hold stocks in certificate form. I came across the perfect example last week.

Some clients came in for their annual review with my boss, a financial adviser. They brought along a letter they had received regarding a stock they owned. They bought the stock a number of years ago and didn't remember how many shares they owned. Also, they had lost the stock certificate. My boss made a copy of the letter and had me call the stock company's shareholder services department.

I spoke to a really nice gentleman who told me that our clients owned over 10,000 shares of the stock and it was worth almost $160,000! He then proceeded to tell me that the clients can't do anything with the shares (sell them, move them to our firm, etc.) until they either found their certificate or paid for a new certificate to be issued. The cost to replace the certificate? About $1,800. Yikes! Needless to say, they clients are searching their house for the lost certificate. Can you imagine losing a piece of paper worth $160,000?

2 comments:

Mrs. Micah said...

Eesh. I think that's why they stopped coming out with those larger bills...just too much risk if you lose them of have them stolen.

If they can't find them, I suppose paying the money would be the most worthwhile course of action. Followed by immediately transferring them to some kind of share-holding firm.

Becky said...

Definitely!