Can shares be recovered from a broker you can't reach?
Can shares be recovered from a broker you can't reach?
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William Walker III · External communityPost link
External question — Personal Finance Stack Exchange
Author: William Walker III
Original post: https://money.stackexchange.com/questions/162755
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
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At the risk of sounding paranoid, I'm curious about how one mitigates the risk that your country could collapse due to internal strife.
Hypothetical:
Investor owns shares in two companies (A and B), via a brokerage in their home country (the USA, if specifics are useful). Company A is located in their home country, while Company B is not (let's say Canada).
Their home country descends into utter chaos - reason agnostic (plague, civil war, zombie apocalypse, whatever) - their brokerage is a casualty of the disaster and conditions are such that recovering the contents/value of their brokerage account is a non-starter for the foreseeable future.
Investor, being a person of means, has fled their home country to the country where Company B is located.
Is there a common practice such that they could petition Company B to essentially re-issue their shares to a new brokerage account in that other country?
Please note I am NOT asking about someone whom their home country has frozen accounts or taken other deliberate/targeted actions to prevent access to their wealth.
How does one mitigate this kind of risk in portfolio planning, generally?
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Justin Cave · External communityPost link
External answer — Personal Finance Stack Exchange
Author: Justin Cave
Original post: https://money.stackexchange.com/a/162757
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
If your country suddenly collapses, you are probably out of luck. At least until things recover sufficiently that court systems can begin functioning and companies can start reconstituting themselves.
Companies know who their shareholders are. But 99.9% of shares are held in street name which means that the shares are registered to the broker. Company A knows that the broker holds a bunch of their shares. But Company A has no idea who the actual beneficial owner(s) of those shares are-- only the broker knows that. If the broker and all their backups were lost and there was no functional court system to try to resolve the ownership issues, you'd be out of luck.
If you were really paranoid about this happening (and it seems highly, highly unlikely), you could have the shares registered to you personally. This is more work than having them held in street name, it makes trading harder, you have to manage the physical shares, etc. But it is a thing that you could do. Of course, in any reasonable scenario of a country collapsing you'd likely be at greater risk of your stock certificates being seized or lost than of your broker completely disappearing. And if this is something you're alert to, it's probably much easier to electronically transfer shares from a broker in one country to a broker in another country (or relying on a broker that has an international presence) than it is to carry them from one country to another.
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Quoted from Forex.com.bd-Editorial External answer — Personal Finance Stack Exchange Author: Justin Cave Source score (net votes, not local likes): 2 Original post: https://money.stackexchange.com/a/162757 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. If your country suddenly collapses, you are probably out of luck. At least until things recover sufficiently that court systems can begin functioning and companies can start reconstituting themselves. Companies know who their shareholders are. But 99.9% of shares are held in street name which means that the shares are registered to the broker. Company A knows that the broker holds a bunch of their shares. But Company A has no idea who the actual beneficial owner(s) of those shares are-- only the broker knows that. If the broker and all their backups were lost and there was no functional court system to try to resolve the ownership issues, you'd be out of luck. If you were really paranoid about this happening (and it seems highly, highly unlikely), you could have the shares registered to you personally. This is more work than having them held in street name, it makes trading harder, you have to manage the physical shares, etc. But it is a thing that you could do. Of course, in any reasonable scenario of a country collapsing you'd likely be at greater risk of your stock certificates being seized or lost than of your broker completely disappearing. And if this is something you're alert to, it's probably much easier to electronically transfer shares from a broker in one country to a broker in another country (or relying on a broker that has an international presence) than it is to carry them from one country to another.
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