How do you transfer shares for departing member expediently?

Jeffrey L Williams on

The subject says it all... mostly.

We have a member departing from our club. We have our
account at E*Trade. The member set up an account at E*Trade
also. We intend to transfer appreciated stock that is very
close to the value of the members account, therefore we want
to wait until the final valuation (this Friday) before
transferring the stock to avoid overpaying him.

E*Trade requires a letter indicating the transfer request.
We will FedEx that letter Friday after the market closes.
The stock will not transfer for up to a week after the
letter is recieved. I personally feel this should be
faster, but can't figure out how to make it so.

I understand that we could have picked a different stock or
transfered less shares to give us head-room and started the
transfer earlier, but E*Trade still does not allow a
"transfer on this date" option so we would have had a race
condition on transfering the stock.

How have other clubs done this transfer in a more timely
fashion?

Thanks,
Jeff

iras1 on

In a message dated 10/28/09 12:10:32 Eastern Daylight Time, jeff1851@bivio.com writes:

The subject says it all... mostly.

We have a member departing from our club. We have our
account at E*Trade. The member set up an account at E*Trade
also. We intend to transfer appreciated stock that is very
close to the value of the members account, therefore we want
to wait until the final valuation (this Friday) before
transferring the stock to avoid overpaying him.

E*Trade requires a letter indicating the transfer request.
We will FedEx that letter Friday after the market closes.
The stock will not transfer for up to a week after the
letter is recieved. I personally feel this should be
faster, but can't figure out how to make it so.

I understand that we could have picked a different stock or
transfered less shares to give us head-room and started the
transfer earlier, but E*Trade still does not allow a
"transfer on this date" option so we would have had a race
condition on transfering the stock.

How have other clubs done this transfer in a more timely
fashion?

Thanks,
Jeff

iras1 on

There is no need to "rush" the transfer. Your letter should state to transfer x shares of ABC to the member as of the withdrawal date. Whether or not E*Trade follows that instruction is irrelevant. The value of the shares is set on the valuation date. Any fluctuation in value (up or down) between that date and the date the shares are actually transferred by E*Trade is at the risk of the withdrawing member.

The only thing you can do to expedite the transfer is to check and double check with E*Trade as to exactly what paperwork they want and then provide it in a timely manner.

Ira Smilovitz

Join me at InvestEd 2010

Investor Education at Its Best^TM
Baltimore, MD August 6 - 8, 2010
http://www.investor-education2010.org/

In a message dated 10/28/09 12:10:32 Eastern Daylight Time, jeff1851@bivio.com writes:

The subject says it all... mostly.

We have a member departing from our club. We have our
account at E*Trade. The member set up an account at E*Trade
also. We intend to transfer appreciated stock that is very
close to the value of the members account, therefore we want
to wait until the final valuation (this Friday) before
transferring the stock to avoid overpaying him.

E*Trade requires a letter indicating the transfer request.
We will FedEx that letter Friday after the market closes.
The stock will not transfer for up to a week after the
letter is recieved. I personally feel this should be
faster, but can't figure out how to make it so.

I understand that we could have picked a different stock or
transfered less shares to give us head-room and started the
transfer earlier, but E*Trade still does not allow a
"transfer on this date" option so we would have had a race
condition on transfering the stock.

How have other clubs done this transfer in a more timely
fashion?

Thanks,
Jeff

jeff1851 on

Thanks. From what I have read in the past on the boards, it seemed that folks figured out ways to make this transfer very close to an exact date. The main concern I have is that the stock we are transfering reports on Wed of next week and it would be nice if the member had a chance to sell before the announcement.

I understand it is the withdrawing member's risk. We are, as you stated, doing whatever we can to make this best for all involved. That's the best we can do.

Thanks again,
Jeff

---- iras1 <iras1@aol.com> wrote:
> There is no need to "rush" the transfer. Your letter should state to transfer x shares of ABC to the member as of the withdrawal date. Whether or not E*Trade follows that instruction is irrelevant. The value of the shares is set on the valuation date. Any fluctuation in value (up or down) between that date and the date the shares are actually transferred by E*Trade is at the risk of the withdrawing member.

Mail