I recently made a purchase in the investing account with the direct purchase right from the transfer agent. I purchased $200 worth of Bank of Nova Scotia (BNS) for 3.070188 new shares. I was filled at $65.14. The yield on these shares is 3.81%. This purchase adds $7.61 to my annual dividend income.
Currently, Bank of Nova Scotia has a 2% discount of shares purchased with reinvested dividends which means the yield will be a little higher. This allows my money to work harder for me. My broker that I use for my main investing does not pass this discount onto me. There are some brokers in Canada that do honor the discount.
Note: As this transaction is through the transfer agent directly, I have to send a check to the transfer agent within there deadline and then wait to the day they advertise (which I know in advance) for new shares to be purchased. I have no control over the price these new shares will be purchased at. There is no commission doing it this way. The downside is that the stock could go way up in price prior to purchase date and after I already sent the check. Is is also harder to sell the stock using the transfer agent directly. A person can transfer amount of shares they own over to a broker for a fee.
Disclosure : Long BNS