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Energy Transfer Partners, L.P. Message Board

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  • dar200 dar200 Nov 17, 2012 2:12 PM Flag

    Calling all DRIP investors

    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?

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    • 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

      • 1 Reply to tomkipp
      • What is so hard to understand about eTrade - close your account and go elsewhere. Ameriprise does not do specials either. They bought in the open market the day following the DRIP at market open. That part made the most sense and funds were invested promptly after receipt and on a predictable manner.

        I closed my account with them some time ago over the DRIP discount issue. The only thing I know for sure is every company does DRIPs differently and when a discount drip program causes something to be totally different then some will not participate.

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