BlogInvesting Tips

Why share registries aren't enough

by Doug Morris, CEO, Sharesight

Share registries such as Computershare, Link Market Services, and Boardroom provide a boring, yet highly important role in financial services. Boring is good in finance. Usually it means that investors aren’t getting screwed. Warren Buffett is boring. Index funds are boring. U.S. savings and loans were boring until they started handing out mortgages to anyone with a pulse. Much like with online brokers, however, investors often think they’re seeing their whole portfolio picture by logging into their share registry investor centre. This is not the case.

Registries keep tabs on who owns what shares and how many. They work with the investor relations departments of listed companies. Employee share option plans and dividend reinvestment plans are also tracked by the registries. These are their primary sources of revenue and they do all of this well. Having an independent third-party perform this role is crucial. A seemingly simple counting exercise gets complex when big money is at stake. Look no further than Apple’s well-publicised options backdating scandal.

featured share-registries

For all their record-keeping prowess though, share registries aren’t in the business of providing investor-facing websites or tools. While you can login and pull down basic information, there are critical information gaps. Plus, the sites don’t offer much in the way of functionality. They perform the role of umpire, providing you with a snapshot of today’s facts. Remember, registries make money from listed companies, not you, the investor. They have little incentive to provide you with a portfolio management service and as such, their investor-facing tools are built for bookkeeping, not investing.

A recent check of one of the most popular share registry sites showed off the limitations. Based on a single HIN or SRN, an investor can see the number of units held in a company, a transaction date, and the current price (not the original execution price). And that’s it. While you can see the current value of the shareholding, there’s no information about the cost basis. The dividend information available is limited to the net amount only and none of the data is editable.

In other words, there’s no information about capital gains or losses, your tax position, or the effect of income on your portfolio.

Moreover your registry account is tied to a single HIN or SRN meaning that if you have multiple entities, you need to login multiple times. To make your life admin even more complicated, each listed company may choose to use a different share registry. Chances are you’ll need logins to at least two different websites. And of course, you can’t make these sites “talk” to one another. A quick check of a portfolio on Sharesight revealed three different registries for the first three holdings we checked.

Such is the dilemma facing investors. Some information lives on your broker’s website, some with the registries, and some on paper. Sharesight works by combining all sources of data to form a complete and personalised portfolio record. Once you’ve done the work to setup your history, you can rely on Sharesight to be a single source of truth going forward.

Using the registry websites can be, however, a helpful step in verifying that the information you’ve added to Sharesight is accurate. If you’ve used our Broker Import feature or have added holdings manually, it’s a good idea to cross-check your portfolio with the registries once a year. And don’t forget you can lookup registry information in Sharesight. Within a holding page, check the Instrument Detail menu for which registry manages your share holdings.

Instrument Detail Menu

Here’s why you need Sharesight with your share registry:

  1. To centralise information from multiple registries and your broker(s).
  2. To calculate real and personalised portfolio performance (for tax purposes at the very least!)
  3. To bring your portfolio online to connect with other apps (e.g. Xero, Simply Wall St, etc.)
  4. To treat your portfolio with some respect by using a purpose-built, kick-ass application!