Gyroscopic Investing

The issue of Street name vs Direct Registration has been a frequent topic of Jim Sinclair of late @ jsmineset.com

For example, see http://www.jsmineset.com/2012/09/12/sen ... me-shares/

Has anyone taken any steps to get their shares out of street name at their broker in light of things like MF Global? If so, please share your experience, thoughts, etc.

In particular, I'm interested in how this might work for ETFs such as VTI.

BTW...holding your bonds directly @ TreasuryDirect is the equivalent of Direct Registration of shares.

If had had substantial sums outside tax-deferred, I'd definitely do it.  But most of my $ in brokerage accounts is in retirement funds.  And I'm no where near retirement age. 

What I'm wondering:  Is there a way to get stocks in an IRA out of street name and into some type of direct registration? 

smurff wrote: If had had substantial sums outside tax-deferred, I'd definitely do it.  But most of my $ in brokerage accounts is in retirement funds.  And I'm no where near retirement age. 

What I'm wondering:  Is there a way to get stocks in an IRA out of street name and into some type of direct registration? 

Most likely not, but I believe it is theoretically possible.

Direct registration has two possible ways of holding shares:
  - Holding paper share certificates yourself, definitely not possible for IRA assets
  - In electronic form at the company agent, in theory possible for IRA assets

You'd have to ask the respective agent for each of your holdings if they can hold your shares as custodian of an IRA.  If so, then they could either pull the shares from your existing broker, or your existing broker could push the shares to them.  I think the pull would be safer -- less chance of them ending up outside the IRA and causing you all kinds of grief with the IRS.

Due to the nature of an IRA (the whole legally required custodian and "beneficial owner" status), it probably doesn't make any practical difference, so I've never investigated even though 2/3 of my investments are in IRAs.  Of course, I also have over the past 5 years moved everything that was direct registered into brokerage accounts in street name, so my opinion on the relative worth of direct registration is automatically suspect. 

Instead of direct registration my investments are divided between Scottrade and Sharebuilder, with some taxable and some qualified accounts at both institutions.  Sharebuilder has better insurance and the natural breakdown of accounts is such that it was easy to put about 2/3 there.  Scottrade has a local office (now within easy walking distance from my office) that on multiple instances I've found to be very convenient.

AgAuMoney, how is Sharebuilders insurance different from the other brokerages? 
Aren't they all under SIPC?

smurff wrote: AgAuMoney, how is Sharebuilders insurance different from the other brokerages? 
Aren't they all under SIPC?

SIPC coverage is limited and most (all?) brokerages supplement that coverage by purchasing additional coverage from a 3rd party (e.g. Lloyds of London).  At least a few years ago when I checked, at some brokerages you had to be in a special account or service package to qualify for the added insurance.

Scottrade and Sharebuilder were fairly representative of what I found.  So if I remember correctly...

Scottrade's supplemental policy is limited to $1,000,000 total account value (and some much lower limit on cash held in the account).

Sharebuilder's supplemental policy is for unlimited account value (but still some limit on cash much higher than Scottrade's limit).

AgAuMoney wrote: Scottrade's supplemental policy is limited to $1,000,000 total account value (and some much lower limit on cash held in the account).

Sharebuilder's supplemental policy is for unlimited account value (but still some limit on cash much higher than Scottrade's limit).

Now that's interesting.  I have brokerage accounts at TD Ameritrade and Fidelity.  I'll have to have a look at their disclosures again.  I might have more than $500K in coverage without knowing about it.