The great financial site FMF had an interesting posting with an interesting downside to Dividend ReInvestment Plans. DRIP downsides are not that many, but they are still a good idea.
And I quote:
Generally, I think they are a good deal if you’re interested in one stock in particular as they decrease costs in acquiring the stock. However, you must be willing to deal with extra paperwork as each DRIP will be its own account (as far as I know) versus being able to hold many stocks in one brokerage account.
Now I never have seen that with my holdings that I have DRiP “turned on” for, and it sounds like a royal pain in the tuchos, if that is the case. Not sure if this is a regulatory thing in the states, or their trading account owners screwing around, but this would drive me crazy as well. It also means that the power of the DRiP, which is adding more stock, and thus making future dividends larger, kind of gets lost in this type of set up, no? Seems kind of odd.