What are differences between a direct and a nominee account
Many consumers do not think about the type of account they are opening when they open a stock trading account. I found that I was being charged additional costs after making several transactions.
Direct Account and Nominee Account are the two most common types of stock trading accounts. The most significant difference between the two stock accounts is that a Direct Account is signed directly by the investor, whilst a Nominee Account is signed by a Broker, who is an affiliated investor.
The difference between a Direct Account and a Nominee Account is that Direct Account holders are allowed to attend the general meeting, whilst Nominee Account holders must fill out a form of attending the general meeting.
Furthermore, Direct Account holders can receive dividends distributed in the listing announcement without paying a handling charge, whereas Nominee Account holders must pay a handling fee to receive dividends. Direct Account holders can also qualify for an IPO and able to access the listed company’s performance report directly.
When opening a stock trading account, it is recommended to choose Direct Account so that no additional fees will be charged and the account automatically signs.
