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Dividend Reinvestment Plan - Strategies without this...


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Hey All,

Looks like IG are never going to implement DRIP despite all the demand.

I was just wondering what broad strategies people employ to get around this, it's a pretty big drawback for me, as a rookie investor those precious savings can make a big difference.

Does anyone know if DRIP is on the radar, and if not what's the best way to mitigate the lack of it?

Thankyou

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  • 2 weeks later...

seems like a basic requirement that has been asked for many years and not being developed. I want this function. Looks like i will be moving too to another trading platform that has better functionality.

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  • 1 month later...

I called up their customer service to inquire about this and I've been told that it is not available in the foreseeable future. Ironically, this is due to the less demand for it, or so I've been told. Anyway, it is a massive disappointment for small investors like us, that a chunk of our investment goes into the fees such as the quarterly maintenance fee and the service that we get is horrible. 

I think the best course of action that you could do is to just manually reinvest your dividend into shares that you like, in which IG would earn a commission fee. Another option would be to just wait until you have a significant dividend and then reinvest it on a quarterly basis so you only have to pay the commission fee once every quarter. 

Personally, if I have shares that earn monthly dividends, I would just manually reinvest it every month so it will compound. By paying the commission every month, at least you don't have to pay the quarterly maintenance in lieu of the three transaction that you will do every month.

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I generally make the minimum number of trades per month to maintain the reduced fees and waive the quarterly charge. I think DRIP has been requested for a good number of years, but I suspect catering for the whims of share dealers/investors isn't very high on IG's list of priorities. Fundamentally, IG is a SB/CFD provider and that is likely where it makes the bulk of its money and thus where it mainly focuses its development (though looking at the forum, I sometimes wonder if it is really developing that side of things all that much either).

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  • 7 months later...
Guest Warwick

Not gonna lie, really been hoping they would introduce DRIP. It makes quite a big difference when compounding. Hopefully some day they will...

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  • 3 weeks later...
Guest Guest J

At least for US shares wouldn't these be commission free?

Most UK brokers I've evaluated charge a small fee (e.g. 0.5% to 2%) for DRIP.  Only US based brokers offer free DRIP, but then you're still paying a hidden fee based on the spread.  But again varies depend on the broker although the DRIP spread is typically smaller than the spread if you bought the share yourself on the open market.

As comparison for UK broker (where I have account for both😞

1. Halifax charges 2% or minimum £1.5(?) for every UK DRIP reinvestment and executes within a few days for receiving the dividend.

2.  H&L charges 0.5% but only does during this at the beginning of each month.

For me, based on this, if I can reinvest £600 UK dividend and be charged £3, giving a 0.5% nominal fee at IG, this seems reasonable.

Saying this, if I was IG, I would implement DRIP (maybe only on UK shares) but charge 0.5% and make some money offer it.  And then I think it could be a win for both sides.

I'm thinking of moving to IG because I trade at least 3x per quarter (so no holding fees) and the trading fees for UK AND US shares are better than Halifax and H&L.

Also the selection of trading options/derivatives, tools, real time quotes, and speed of trades are much better than I've seen at most UK based/accessible brokers (I've also have demo accounts at Plus500 and eToro).

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