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iamnik77 (96.28)

Is someone leeching off of my employee benefits?

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May 28, 2009 – Comments (1)

A few years ago I took advantage of an opportunity to purchase some shares of JP Morgan Chase through an employee stock purchase plan. At the time the shares were trading at around $40.00 and my cost basis was around $24.00. The plan carried some risk the way it was structured, but odds were if you participated you would profit and clearly it worked in my favor. Before you think that I was some sort of priviliged company executive, let me say I was far from it. I was fairly low on the totem pole and only made about 30k per year. Very few of my peers took advantage of this company benefit which later was tweaked so that employees could only get roughly a 5% discount and they couldn't sell for a year after their purchase without being denied the opportunity to make new contributions for a year. With such a small margin of safety, I ceased to partifipate in the program after the changes were made.

Today, I noticed the shares were trading at $36.41. Since the banks don't really have any tailwinds that could create a jump in earnings, I don't see how JPM could trade much higher than this for a long time. So, I decided to sell the shares in my employee stock purchase account today.

The fees on this transaction (handled by BNY Mellon) were nothing short of exhorbitant. I sold roughly 235 shares and the transaction fee was $15.00 plus $.50 per share! That is roughly 1.4% of my total account balance just to sell! This same transaction if handled by my local discount broker would only have had fees of 1/10 of 1%. So BNY Mellon's fees are roughly 14,000% higher than my discount broker's fees. This is probably in addition to whatever JP Morgan Chase pays BNY Mellon to manage these accounts.

In addition to this, BNY Mellon can't even give me a sale price. They say they usually sell within one business day but can't guarantee it will be within that time frame. My discount broker sells within seconds. As volatile as this market is, BNY Mellon is really leaving me hanging on this transaction!

Your thoughts?

 

1 Comments – Post Your Own

#1) On May 28, 2009 at 3:24 PM, motleyanimal (93.75) wrote:

The way to avoid the higher BNY fees is to take possesion of the shares and/or transfer the shares to your discount broker and then sell them. I have done it many times in the past. There could be a transfer fee, but I never paid one through BNY.

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