Transfer Agent

A transfer agent is a financial institution, bank or trust that a corporation hires to keep tabs on all its investors’ records, transactions and account balances. They’re kind of your b*tch, but in like a really smart and helpful way.

They handle investor correspondence, can cancel or issue security or stock certificates, processes investor mailings (no one wants to go to the post office) and deals with other things that come up like lost certificates. A transfer agent works closely with a registrar to make sure investors receive their interest payments and dividends when they are due. They can also send monthly investment statements to mutual fund shareholders.

When someone purchases a security, the new owner gets a shiny new certificate, most commonly issued in book-entry form nowadays. Rather than dealing with the time and hassle of issuing physical securities, book-entry securities keep track of things electronically. It’s what modern people do.

Different investments issue book-entry securities in different forms. Bonds have a face amount, stocks have shares, and trusts have units.

When stockholders need to vote on corporate decisions, such as a merger or company sale, the transfer agent sends proxy information to the shareholders so that they can vote. The transfer agent also sends the annual report to shareholders, which includes the company’s audited financial statements.

At the end of the year, the transfer agent and registrar send federal tax information to your investors, including dividends and interest paid, along with reporting on security trades during the year.

All in all, they do a lot of crap for you and you’d be well served to work with such a firm that has your back Otherwise, you’d be stuck doing all this stuff and more yourself. And that just sounds like no fun at all.



I don’t know where we would be without our transfer agent. They take care of all the details that frankly, I don’t have the time or energy to worry about.