Direct investment programs were great when commissions were much larger than the $10 or so most pay today. Direct investment programs used within a club environment can create some undesirable problems. First is the delay between making an investment decision and when that buy/sell is executed. Second is the delay in receiving funds when a stock is sold. if you want to sell A and buy B you have to get the money from A's plan into your brokerage account (or B's direct investment plan) before you can make the purchase. Finally, some direct investment plans have been very difficult to deal with when a club wants to transfer shares - requiring signatures from every member or other erecting other obstacles.

 

On the positive side, most direct investment plans allow you to invest fixed dollar amounts, but there are now some discount brokers that offer the same capabilities.

 

Ira Smilovitz 

 

Wanted to get some thoughts from any club that uses a direct
investment program instead of an online brokerage account.
We currently use TD Ameritrade and have been pleased with
them, but are thinking of checking into a cheaper
alternative.  Our club is very small in size and so we tend
to buy in small denominations (typically < $1000 per trade)
so the $10 commission can really add up for us.  Any
information of good or bad experiences would be helpful for
us in making our decision.  Thanks.