If you are like me who is doing the Dividend Growth Investing strategy, you may have noticed that this type of approach is as passive as it comes and it takes very limited amount of time of managing your investments. Now, I don’t check my brokerage account (E*Trade) as often as I used to, but I still login about 1 to 2 times per week currently.
Today though, logging into my brokerage account I noticed that I had an alert in my notifications box. Generally, I love seeing these alerts as it notifies me when the dividends have been paid to me. Unfortunately, it wasn’t a dividend, but that is okay since I have 3 of them being payed out to me tomorrow. But anyways, I checked out the alert details as it provided me further specifics on a recently completed acquisition transaction between Reynolds American (RAI) and Lorillard (LO) stocks. Long story short, I received 8 shares of RAI for my 28 shares of LO and $1,423 in cash.
Not sure why I didn’t receive a notification through the brokerage account for as I wish I could of made my vote and chosen to either receive stock for stock or stock for cash reorganization. I probably would have chosen stock for stock, but I guess that is the way the deal was made and the was no choice involved for the shareholders. Additionally, upon checking my transaction history I noticed that I got slapped with $20 reorganization fee from E*Trade. Scottrade and other brokerages charges this same exact $20 fee as well, some charge more, so I would take a look at your transaction history. The bad news is that every time stocks merge or get acquired or even when some share splits occur, your brokerage account charges this sort of reorganization fee.
Now I never even heard or even seen this type of fee before, which kind of made me puzzled since I had very little control over it. So I though it was well worth a shot to kind of experiment and investigate further on this reorganization fee. I thought, I’ll just call the brokerage to get some further information on this recent RAI and LO acquisition and nicely ask them to remove the fee. After a few minutes of hold time, I had a person on the other side of the line. Usually E*Trade representatives are quite professional, so being professional in return can do wonders. After talking to them for a few minutes, I went ahead and asked them if they would be able to waive or refund the reorganization fee since I though it was somewhat unfair of a charge. In response to my question and after a somewhat of a pause the representative agreed to credit back the $20 back into my account. Another win in my book! Don’t like fees as they eat away much of the profits. Now, I am not sure if every reorganization fee can be waived just by simply calling and asking, but I guess we will see in the future.
Give it a shot and if you succeed please let me know bellow.
I researched further and did find 2 other reorganization fees back in 2014. I have called back E*Trade today (06/16/2014) and the representative unquestionably removed both of the fees. Awesome service! 🙂
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