Recent Transfer Agent Surveys –
What Do They Tell Us?
Not too much, unfortunately. When industry experts and issuers shared their observations about the 2013 “results” with us, we (and they) concluded that the information is questionable at best, and meaningless at worst.
Of course, to be fair to the main surveying companies, there are only six large transfer agents left to evaluate from surveys sent to public company clients. They are American Stock Transfer, Broadridge Corporate Issuer Solutions, Computershare, Continental Stock Transfer, Registrar & Transfer Company and Wells Fargo. All but Broadridge are survivors of a 30-year war to see who could profitably remain in the business. (Broadridge is relatively new to stock transfer, but is a similarly veteran player in the shareholder services industry.) This long-term consolidation has produced a very interesting result: all remaining transfer agents enjoy overall survey satisfaction levels of approximately 90%, when a) results are properly “weighted” to reflect number of survey responses by agent, b) multiple surveying parties’ results are blended together, and c) statistical “plus or minus” deviations are accounted for. And this is logical to us, because if the surviving transfer agents are as good as they can reasonably be after such a long struggle to retain or grow market share, that leaves an understandable 10% of respondents who either experienced/witnessed a mistake made (unavoidable with this function) or were simply “inclined” to complain because that category of individual tends to respond to surveys more than those who are satisfied. In other words, we seem to have achieved “parity” in stock transfer when it comes down to who does a good job – and to what extent – with the core function.
Which leads us to what else the surveys tell us: how various agents fare within the different functional disciplines of relationship management, shareholder communications, proxy services and the like. Here some meaningful differences do appear, but our skepticism as to their accuracy is again aroused by the dearth of actual results by function, and sufficient results are of course necessary to produce statistical reliability. There is also a case of entire agents’ results not being captured in some surveys, apparently due to squabbles by those agents with surveyors over how their results will be presented, and even over the “uncomfortable” issue of how some surveyors are actually paid for their work.
The bottom line for us is traditional surveys have lost their value as accurate indicators of which transfer agents are better than others. So, while they can certainly be included as one element in a transfer agent community evaluation, their worth should most appropriately be confined to multi-year trend analysis – and even then with a grain of salt.
Bringing us to a final news flash: in 2014 Shareholder Service Solutions will produce its own transfer agents comparison report, based on a completely different premise and set of criteria. Stay tuned for it, on this website.