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Energy Transfer Partners, L.P. Message Board

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  • chuck11262004 chuck11262004 Nov 16, 2012 6:14 PM Flag

    Calling all DRIP investors

    dar200...I hold ETP in my E-Trade account and I'm signed up for the DRIP program. I see my distribution booked on 11/14/12 and that they reinvested @ $42.8304 (which was about the high of the day on Wed 14th).

    Question: How does Schwab & Ameritrade reinvest distributions at a "Discounted" DRIP price?
    Is it possible that all DRIP participants automatically reinvest at a discounted rate, but E-Trade keeps the discount?

    Sentiment: Buy

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    • I can answer for TD. They figure out the drip price on their own and IF - note the IF - you have an account of sufficient size AND you have requested to sign up for "Specials" on DRIPs they simply credit your account and get the discounted shares in a day or two from the transfer agent.

      Do not know what E-Trades policies are. There are three possibilities. In neither cases are they "screwing you". #1 - They may now participate in DRIPs and simply buy in the open market - usually at the opening price on the day following payment. #2 - They participate in DRIPs but only handle "Specials" on request. #3 - They do not deal with "Specials". If either #2 or #3 are correct you have two choices - move your account or forget it. E-Trade cannot legally keep a DRIP discount.


    • Read the specifics of the discount drip program on the ETP website. Then you have first hand facts to present to ET. ETP hires a drip administrator. Anybody who wants discount drip has to sign up with the administrator. This includes brokers for street name units (like mine at Ameritrade and Fidelity and yours at ET).

      The drip administrator knows on the ex-dividend date how many drip DOLLARS are to be reinvested.
      On the evening before the pay date the drip administrator calculates the price per unit, just like I did.
      The drip administrator then divides total dollars to be dripped by the discount price to calculate total drip units needed and notifies ETP. ETP issues new units to the drip administrator who, in turn, distributes them to shareholders including brokers who in turn allocate total broker shares to the customers who elected discount drip. The unit transfers are all done electronically. ETP keeps the drip cash.

      In your typical drip thru a broker, the broker knows how many drip dollars are to be reinvested on the ex date and the broker buys as many shares as those dollars will buy in the open market. No new shares (units) are created or issued by the company. Fidelity buys drip shares three business days before the pay date so those trades settle on the pay date. Ameritrade buys in the open market the first business day after the pay date (thereby "stealing" (my opinion word) 4 to 6 days worth of interest on the dividend cash. It appears Etrade buys on the pay date.

      I don't know why Etrade does not register with the drip administrator for the discount in newly issued units. I don't know if or how they profit by screwing their client. Why don't you ask them?

      • 1 Reply to dar200
      • I have asked E-Trade through e-mail messages and through my assigned broker who calls on occasion. They do not offer any reasoning for this irresponsible customer dissatisfaction. I have opened my latest account with TD Ameritrade and as soon as I feel comfortable with TD`s program, I`ll be moving all my accounts where I use DRIP.....and if that`s satisfying, I`ll move everything to TD. Mind you, these aren`t immense accounts, but they are significant and I buy shares every month. E-Trade needs to hear this same reaction from more than me. I do like E-Trade`s systems, but missing the DRIP discount is just unacceptable. I recently wrote a letter to the editor of Money magazine explaining that this was a significant drawback to E-Trade customers since they had just published an article on broker satisfaction.

        Has anybody else contacted E-Trade about this issue?

        Sentiment: Hold

57.82+0.35(+0.61%)10:13 AMEDT

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