Is there a logical balance point between service and price? (Part Two)

So, you want to know if this is just another story that’s going to end in “You get what you pay for…” Well, it’s not.

On the low end of the scale of transfer agent pricing, you can certainly save money in the short run. But the longer you stay with the really low-priced transfer agent, the greater chance something will get screwed up, the longer you will go without leading-edge technology, and the longer you and your shareholders will suffer from bad service. Just last week an issuer called us and said, “I can’t reach my current transfer agent half the time! He loses papers all the time! I would like to get a new agent! Can you please help me?”

And now, with the stock exchanges mandating issues to be DRS eligible with DTC (Depository Trust Company), at least some of the low price agents will not meet DTC eligibility, and therefore, cannot provide you with the required DRS eligibility. And what about insurance and fiscal stability? Do you know how secure your data really is? Are you protected if one of these low-priced agents makes a mistake, or worse?

Of course, you can find a really cheap transfer agent-you can find a really cheap anything!
But no, I’m not going to say “You get what you pay for”, because when you go for the lowest-cost provider, you are not going to get what you pay for –you will get either less than you pay for, i.e., no service, no insurance, etc., or more than you paid for, i.e., trouble!

Next post I’ll tell you why you also don’t get what you pay for if you go with the highest-priced spread!