My sole dividend stock changed providers from Amstock to Wells Fargo. This happened while we were in the middle of a move so I put off logging into my new account until I got a letter from them (forwarded from our Paradise address) saying that they’d sent me a letter to my actual address and it had been sent back to them. Which was odd because I technically have 2 (now three… which is part of the problem) accounts with them (common stock and preferred stock) and I got the other communication just fine and the two accounts are linked.
When I got my quarterly dividend posted to my savings account and it was the same as last quarter’s. This sent off an alarm bell since my preferred stock is supposed to purchase common stock and the common stock is supposed to deposit quarterly into my savings account. Thus my dividends increase slightly every quarter. Except not this quarter.
Instead, it looks like under Wells Fargo that the preferred stock is dripping into an entirely new common-stock account just created by Wells Fargo, and that common stock account is dripping back into itself instead of depositing. It dripped a whopping $1.80 into itself this past quarter. Their webpage interface is terrible so there was no indication that this was going to happen from their webpage until after it happened. A priori it looked like all of the settings had been retained from the previous provider.
I’m not really sure that I ought to be dripping any of this stock or if I should be dripping all of it. The main reason I have it set up the way it is is so that the dividend doesn’t become worth less over time. Having the preferred stock (which cannot drip into itself) drip into common stock keeps it above the rate of inflation, in theory. The main reason I don’t drip all of it is because it is a lot of money to add into a single stock (a utility) that went bankrupt back when I was in graduate school. The idea is that I take the dividends and then funnel that money into say, retirement. Which, since money is fungible, sort of happens.
So I emailed them and explained and they emailed back and said they would fix it and consolidate the extra account in the next dividend cycle. Hopefully that will happen!
So what’s the moral?
I guess, keep an eye on things, especially when providers change.