10 Key Stock Transfer Agent Deliverables

Stock transfer agents have come a long way in the past decade in terms of what they can do for their corporate clients – and even how they think about their service offerings.   Evidence of these changes can be seen in what the better transfer agents consider key “deliverables” to clients these days:

  1. Transparent processing (aka the “glass pipeline”) Knowing where every transaction is at any point in time, so its exact status can be revealed to an inquiring party and so that it will never be “lost in the shuffle.”
  2. Multiple client and shareholder access portals These include telephone, e-mail, internet, “live chat,” back-up relationship manager, regional client service offices, seminars, client advisory boards and focus groups.
  3. Multiple and modular service offerings Stock transfer, dividend payment, dividend reinvestment, direct stock purchase plans, employee plan administration, abandoned property services, proxy distribution and tabulation, proxy solicitation and even “stakeholder relationship management” – all of them able to be separated or combined, price-wise, at the discretion of the client.
  4. Leading-edge thinking when dealing with regulatory changes and producing new shareholder services To wit:  Notice & Access, how to combat loss of the broker discretionary proxy vote, “empty” voting fixes, Direct Registration System, cost basis accounting changes per the EESA of 10/3/08, and cross-border investing tools.   To a large extent, this means trying to replicate services offered by the best brokers out there.
  5. Transparent and “reliable” fees Ensuring invoices are clear on what exactly is being charged, for exactly what service, and where a charge comes directly from the contract’s fee schedule and where it does not.   Reliability means no change in pricing without advance notice to the client, affording an opportunity to discuss the change before it is implemented.
  6. Transparent expenses Ensuring expenses are as granular as possible, to underscore their “out-of-pocket” nature.   Where expenses are not out-of-pocket, this should be revealed in the stock transfer contract or the invoice itself.   “Handling fees” added to out-of-pocket expenses are, we feel, just that – fees – and thus should appear instead in the fee section of the invoice, or be embedded in core service fees.
  7. User-friendly web site Providing elements like services offered, from where, commentary on latest industry issues (link to electronic newsletter?), sample clients, number of clients and shareholders served, “demos” of electronic system access, glossary of industry terms and recent accomplishments as an industry participant.
  8. Client education (free and/or fee-based) Face-to-face seminars (one day or less) on industry issues and the agent’s response to them – perhaps four per year, in the north, south, east and west – supplemented or, if necessary, supplanted by web cast versions; newsletters; web site updates; management “road shows” to mid and large-size clients; client advisory board.
  9. Management access Showing, at the transfer agent’s CEO level, the pride and confidence in the agent’s service, and interest in each and every client, to welcome direct calls, e-mails and letters from clients.of any size.   The reality is these calls never become onerous, and they pay enormous dividends to the agent in terms of credibility.
  10. Industry association participation (NIRI, Corporate Secretaries, SSA, STA) Including regular attendance by agent representatives at local chapter meetings, at regional meetings, at national/annual meetings; suggesting topics for meetings; securing speakers for meetings; being a speaker or panelist at meetings; sponsoring meetings and events where possible (even at just a “donor” level); serving on planning committees; helping with new membership drives.

We believe there is truth to the claim that transfer agents now need to “get big or get out,” not as an all-consuming quest for “size” but rather as a mind-set of “connectedness” to the industry – adding functionality to the service portfolio, adding clients of various needs and industries, adding readiness for regulatory changes that are coming, being a true participant in the marketplace.   Key stock transfer agent deliverables are more robust today than they ever were, and they are only becoming more numerous and complex with the passage of time.