How to Buy Stocks without Broker

There are two basic ways to buy stock without a broker;

(1) Directly from the company, through Direct Stock Purchase Program (DSPP)

(2) Directly from a person who owns the stock

Stock can also be sold similarly.

For this discussion, the term “broker” includes broker-firms and individuals licensed as brokers. Online brokerage accounts are therefore considered using the services of a broker, even though you will usually not speak to a broker (as in the old days!).

For any method of buying / selling stock, change of ownership must be registered through the stock transfer agent, in accordance with applicable regulations.

Potential Problems With Using DSPP

Buying stock directly from a public company, instead of using a broker, may have advantages.  However, it is important to understand the entire process of buying and selling through the DSPP. For many plans, total fees are actually higher than fees for low-cost online brokers.  

Most important to consider however is the inability to set a specific price when buying or selling.  

Sources of Information

A variety of information about direct stock purchase plans is available online.  However, verification should be obtained from alternate sources. Much information online is outdated or just not correct.

Web site for Timeless Wealth lists 48 stock transfer agents, many of them relatively small;

Major transfer agent firms provide lists of companies with stock purchase plans, allowing for easy research and comparison. However, for any company, plan details should be verified by checking the company web site, usually in the “Investor Relations” section. 

Computershare makes it quite easy to buy and sell shares. Obtaining answers to basic questions is also relatively simple. 

BNY Mellon

To see a list of all companies with DSPP plans managed by BNY Mellon click on “Investment Plan Enrollment” on the home page under “Resources” (right side). Then click “ALL” under “Alphabetical Company Name Search”.

Some transfer agent sites are not so easy to navigate, unless you know where to look. For example on the Registrar and Transfer Company site, the only way to find information about stock purchase plans is to look under Dividend Reinvestment Plan, and then search under each letter of the alphabet.

The following web sites provide information about DSPPs for a wide range of companies.


Contrary to some online information about direct stock purchase, buying stock through a DSPP is most often not free. DSPPs generally charge a small fee for buying and a much higher fee for selling. When evaluating a DSPP, consider the fee to (eventually) sell as well as to buy.

Fees are structured to encourage regular buying.

Plans are set up to encourage scheduled, “automatic” purchases, generally by way of direct debit of a checking account. Purchase fees are typically a few dollars lower than the fee for one-time buys.

Examples of DSPP fees for buying and selling stock (as of April 2011) are listed below for selected companies, using the following notations;

Buy-Auto; Regular, automatic buying at scheduled intervals (set by company)

Buy-Any;   Purchase at any time; without any fixed schedule

Sell-Batch;  Shares “batched” together with other sellers. Sale may occur at end of day (that order is placed) or later, at “market” price.

Sell-Select; Shares sold at “market” price, as soon as practical after sell order is placed.  

Union Pacific;

Buy-Auto; Free       Buy-Any; Free

Sell-Batch; $15.00 + 12 cents per share

Sell-Select; $25.00 + 12 cents per share

Campbell Soup;-

Buy-Auto; $2.00       Buy-Any; $5.00

Sell-Batch; $15.00 + 12 cents per share

Sell-Select; $25.00 + 12 cents per share


Buy-Auto; $2.50 + 3 cents per share

Buy-Any; $5.00 + 3 cents per share

Sell-Batch; $15.00 + 12 cents per share

Sell-Select; Not available 

Note that, although buy-side fees are generally low (or zero), sell-side fees are much higher than the fees charged by low-cost online brokers.  For example, the fee for selling 200 shares of each stock listed above is $39 (Batch) and $49 (Select). Compared to the $7 flat fee charged by Scottrade, and similar fees by other low-cost brokers, these fees are quite high. 

However, if numerous separate purchases are made over several years, lower fees on the buy-side will more than cover the higher fee when selling. For example, if the fee for automatic buying is $2, and shares are purchased each month, total annual savings (compared to $7 fee) is $60. If stock is purchased monthly for five years, total savings (not including interest) is $300 for purchase fees. Assuming an average of 10 shares purchased each month, a total of 600 shares are to be sold. Although the typical “Sell – Select” fee of $97 ($25 + $72) is much greater than the $7 flat fee charged by low-cost broker, the $300 savings on the buy side clearly results in net savings overall. 

Buy-Sell Process

One of the more important issues to consider is lack of control for setting a price for buying or selling. 

Stock will be purchased (by the DSPP) at whatever price happens to be available at the time the plan buys stock in the open market. The individual participant (buyer) does not have the right to request a purchase price, as can be done when placing a buy order though a broker.

The DSPP actually uses a broker to buy and sell shares. For buying, the plan aggregates orders (typically each week) and has the broker buy in the open market.  Selling may occur the same way, unless the participant requests a “market” sale. However, the seller will still only be able to sell at the “market” price, not at a set price.

An auto-plan can be terminated. However, once an order is placed it usually may not be retracted.  

Additional conditions are applicable. For example, minimum purchase amount typically ranges from $250 to $1,000.

Dividends and Taxes

All DSPP plans have a dividend reinvestment feature that encourages the stock owner to reinvest dividends in more stock (so the company does not have to pay out cash). However, fees may still be charged.

Taxes must always be paid, one way or the other! Although not specific to DSPPs, tax regulations applicable to dividends are effective whether taken as cash or reinvested in more stock. Tax On Reinvested Dividends.

Incorrect information about taxes on dividends is often found, such as on a web site that appears high in Google search lists;

Buying Directly From Another Owner

Buying stock directly from another owner should be considered if this option is readily available, such as from a family member or friend. However, study requirements carefully before proceeding with this method, which might be too time-consuming and expensive to be worthwhile.

Some DSPPs make it easy to transfer stock ownership to another person, without any fee, and without having to obtain the stock certificate.

If you must obtain the stock certificate, consider calling the transfer agent before calling the broker. Staff of Registrar and Transfer Company (RTCO), reached by phone, said that they do not charge for the certificate.  

However, for stock held by the broker (in your account), the broker must request the stock certificate from the transfer agent. The brokerage firm might charge for this “service”. Policy of each broker must be verified before ordering the certificate. However, verification can be difficult. As of 3-23-11, web site of broker-firm Scottrade does not include any information about requesting a stock certificate. A broker reached by phone was not able to explain their policy.

With the certificate, selling the stock is accomplished by simply signing the certificate over to the buyer (for whatever price is agreed, or as a gift). However, as with any other method of trading stock, the change of ownership must be legally registered with the stock transfer agent.

Transfer agent for many public companies can be found at

However, the best way to find the transfer agent is to contact the company directly. You can usually contact an investment relations department, which is often listed on the company web site (if available).