£SOM Dividend payment delay issue.

Monday, Dec 03 2018 by
2

Hello,

This is the response I got from my IR contact at Somero Enterprises Inc (LON:SOM) when I asked what could be the possible cause for the delay in payment.
I replied, that this kind of thing will impact sentiment and as such they should take it seriously.
I have left her email on in case any other holders which to express their frustration.
Regards
Paul

Mr. Hawkins,

We do pay in USD as reflected in the announcement and we get questioned on this with nearly every dividend payment. I have again reached out to our Registrar on your specific inquiry and they provided the following explanation:

What is likely the case is the cheque will have gone to the brokers. I don’t see AJ Bell on the register so it is likely they hold their shares through someone like Pershing Nominees.

So what will happen is we pay Pershing a cheque, they wait until it clears before passing this onto A J Bell, who then in turn passes this onto the underlying holder. As you can imagine this can sometimes take a little while.

Unfortunately, neither we nor our Registrar have any control over the processing of the dividend payments once it is released to the brokers. The relationship between A J Bell and their custodian is not something that we have visibility into nor the ability to influence.

I’m sorry that I can’t be of further help on this matter. I would hope that your broker has received and processed the dividend payment by now as it seems impossible that it would take this long for funds to clear.

Kind regards,


_______________

JENNIFER OLIVER
Director of Legal & Corporate Affairs
Investor Relations & HR

Somero Enterprises, Inc.
14530 Global Parkway
Fort Myers, FL 33913 USA
p: +1-239.210.6529
m: +1-603.540.6010
Oliver, Jennifer


Filed Under: Dividend, Shareholder Rights,

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22 Posts on this Thread show/hide all

doug2500 3rd Dec 3 of 22
1

I'll be open from the start and say I do not like the nominee system.

This seems to be one of its worse manifestations, where not only do you not own the shares, but nor does your broker. (And I know you're the 'beneficial' owner but why add the complication of layers of ownership?)

I may be naive and confess I'm not even sure my ISA broker holds all my shares, but it had never occurred to me before that they might not.

I'm actually quite impressed with Somero Enterprises Inc (LON:SOM) following this up. From their point of view they've paid the owner on time.

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Merlotman 3rd Dec 4 of 22

Agree the problem is with the broker. My SOM divi was in my account by 23/10.

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bluecurve 4th Dec 5 of 22
1

I own a business with customers in the US, and, on the odd occasion that someone has paid us by cheque, it has taken around 6 weeks to clear. It seems to be an issue between UK/US banks, in that the cheque has to be physically sent back to the US and then processed. Seems a bizarre delay in this day and age. I think most US banks still charge for a wire transfer, hence the continued use of cheques.

I own Somero Enterprises Inc (LON:SOM) at AJ Bell so have the same issue.

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peterg 4th Dec 6 of 22
2

As far as I'm aware it's only those with AJ Bell who have this issue, so I think trying to lay part of the blame on Somero Enterprises Inc (LON:SOM) is not really reasonable. Selftrade got mine to my account within a couple of days (perhaps 1 day slower than a normal £ div), and all the others I've heard reports of have managed much the same. This is clearly an AJ Bell issue.

The SOM letter suggests that the role of an intermediary is at least part of the issue here. I'm not clear if that is something AJB in particular use, or perhaps the other brokers get theirs paid directly? Alternatively they simply credit accounts on the payment date, as many do with £ divs. Either way the ball is firmly in AJB's court. Having said that, it's only fair to point out that I hold my SOM with Selftrade as I couldn't buy them in my Barclays account, so there's an argument AJB are ahead of Barclays on handling this!

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Laughton 4th Dec 7 of 22
1

In reply to post #424303

As far as I'm aware it's only those with AJ Bell who have this issue

Seems that they have the same problem with Taptica International (LON:TAP) dividends. Another broker managd to pay me my dividends on November 23. AJ Bell tells me that dividends on shares held with them likely to take another two or three weeks to be credited.

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willhampson 4th Dec 8 of 22

I have no experience with AJ Bell, but I find that the crediting of overseas dollar dividends to be entirely erratic across the brokers that I use. For example X-O still haven't credited my XLMedia (LON:XLM) dividend due on 2/11 but promptly credited by Somero Enterprises Inc (LON:SOM) and Taptica International (LON:TAP) (ouch today) dividends. Conversely, Charles Stanley - who I find generally slow with overseas dividends - credited XLM the next day after it was due; but with other overseas payers I have to constantly chase and it can take 3-4 weeks. IG can be similarly erratic.

I guess you can say "first world problems", but it really shouldn't be this complicated should it in today's world...

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Aislabie 4th Dec 9 of 22
2

I have an AJBell account and I too have not yet received my SOM dividend. I can see no reason at all why this absurd delay is not entirely the responsibility of AJBell.
- they are a large organization and should have a USD account into which these payments should be made and cleared. Three or at most five days to have cleared funds in that account would be reasonable. If not they should be in serious questions with their bank or other potential banks about their cash management facilities.
- the FX transfer should give good funds again in a maximum of five days. If not, then talk to the many companies in London who are on the lookout for this business.
Somebody has my money. It is not Somero and it is not me, everything else is AJ Bell’s responsibility and as a company looking for a squeaky clean IPO a public statement by AJBell’s management should demonstrate exactly who has benefitted from this cash for the past several weeks.

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leoleo73 Thu 8:37am 10 of 22
1

AJ Bell tried to fob me off about this too and also ignored my request to report on other missing dividends. I have now made a formal complaint.

Has anybody tried switching from AJ Bell to e.g. HL? How long were they without access to trade?

(I recently completed a transfer of a Child Trust Fund from F&C's service to HL. There was a 2 week regulatory cooling-off period, one week for the instruction to be seen by F&C, another week to sell and settle then 3 working days until HL had the money and let me deal. I thought that was pretty good.)

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herbie47 Thu 6:41pm 11 of 22

In reply to post #425138

If it's anything like their dividend payments I would not hold your breath. I don't know, switching brokers seems to take a very long time, I have seen reports about Barclays which took many months.

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herbie47 Thu 6:43pm 12 of 22

In reply to post #424243

I have received the odd US$ cheque, one this year took about 4 working days to clear I don't see why it took 6 weeks for yours. Maybe it is the amount, mine was quite small about $25.

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sharw Thu 7:17pm 13 of 22

iii allow you to keep money in 7 currencies including sterling, euros and US$. I think this comes from the TDW platform that they took over. Dividends are credited in their own currency and it is up to you to convert it if you wish, which can be done at any time. I only have experience of IAG (ex BAY) dividends but they seem to appear in the a/c much more promptly now.

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leoleo73 Fri 7:12am 14 of 22
1

Still no dividend. AJ Bell are now blaming the registrars, tell me yesterday that:

All  funds have to be cleared from the receiving bank, currently the registrars receiving bank has a back log of cheques. 

Since the registrars choose who to bank with, this seems to contradict hawkipa's response from the IR:

neither we nor our Registrar have any control over the processing of the dividend payments once it is released to the brokers
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grumpy5 Fri 9:05am 15 of 22

I am guessing you lot will not be chasing the AJ Bell IPO!!! ;-)
On a slightly different tack, some heavy institutional selling has made the shares even more of a bargain.

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bluecurve Fri 9:32am 16 of 22

In reply to post #425448

Yes, It was for about $40,000 I remember. I think in a situation like this that Somero Enterprises Inc (LON:SOM) would have sent a cheque to the custodian for the full amount of the dividend for all shares held in it's custody. Hence, likely to be in the $,000s. The custodian then "divis" out the correct amounts to each account (pardon the pun)!

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bluecurve Fri 9:36am 17 of 22

In reply to post #425578

Looks like the AJ Bell (LON:AJB) is up 33% on the IPO price. Plenty of volume at the 215p level. I bought some in the IPO but was scaled back by over 57%. Won't be chasing it at this level, but looks like it will be popular.

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hawkipa 7:46am 18 of 22
1

Morning all, Just had the following from AJ Bell. I have immediately forwarded on to Jennifer at Somero. It does highlight a few issues to me, one of which being the charge imposed by AJ Bell for FX payments, when they clearly don't pay for the service themselves. BoA will just make a spread trade price for the transaction.
It is not clear who exactly the fault lies with, but it is clear it is an issue and why AJ Bell don't have a USD account is beyond me. I have asked for clarification from AJ Bell on the exact mechanics of the payment process. Will be interesting to see if they expose themselves with regards to an unjustified FX charge.

Finally, any of those affected, please do email Jennifer Oliver as only sustained pressure will result in a change of mindset. Oliver, Jennifer - joliver@somero.com

Regards
Paul

Please be advised, we will not appear on the shareholder register as AJ Bell or as Pershing Nominees (not entirely sure who they are). We
will appear under our nominee name, which is Lawshare Nominees Ltd.

To confirm, we have received the currency cheque. However, this was sent to the bank to clear. The bank then sends this onto the
clearing bank, which in this case is Bank of America. Unfortunately, the delay lies with them, which according to them is because of a
"large backlog of currency cheques". We are continuing to chase as much as possible and hope to have this credited to your account in
due course.

If you have any further queries, please feel free to contact us.

Yours sincerely

Aaron Willsher
Dealing Services Team

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timarr 9:38am 19 of 22

In reply to post #426093

Will be interesting to see if they expose themselves with regards to an unjustified FX charge.

Not sure what "expose" means - the 0.5% FX charge on foreign currency dividends is in their standard rates and charges table, so it's hardly a secret. You sign up for the service, you pay the fees.

Generally, I find AJ Bell FX dividend payments are deposited fairly quickly. For instance the Apple dividend payment date was 15th November and the dividend was in my account the same day (the FX charge took another 4 days to levy). Somero is a consistent outlier which suggests to me that the problem is more likely to lie on their side than AJ Bell's, possibly due to their quaint, old fashioned insistence on using cheques to make the payments.

As an accountholder and a shareholder I certainly don't want AJ Bell introducing new processes and costs just to deal with a specific problem with a specific company, even if that means it could speed up the dividend payment in that instance.

timarr

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simoan 9:56am 20 of 22

Hi timarr,

Somero is a consistent outlier which suggests to me that the problem is more likely to lie on their side than AJ Bell's, possibly due to their quaint insistence in using cheques to make the payments. 

As an accountholder and a shareholder I certainly don't want AJ Bell introducing new processes and costs just to deal with a specific problem with a specific company, even if that means it could speed up the dividend payment in that instance. 

I agree that a large part of the blame is with Somero here. What on earth are companies doing sending out currency dividend cheques in this day and age? I confirmed with the registrar that there is no wire transfer option for AJ Bell to use. In particular, Somero is only listed in the UK and so while I'm quite happy for it as a US company to declare dividends in USD, I seen no reason why it cannot pay UK based investors in GBP as other companies do.

HOWEVER, AJ Bell could easily be more  customer friendly and do what other brokers do and pre-credit accounts with the dividend on receipt of the cheque. So once again, they are out of line with industry practice, just as in the FOS case that was found against them relating to "treating customers fairly" with regard to exit charges. 

I'm a shareholder too, but there are clear inadequacies with the company behind the scenes. I won a FOS case against them and they basically ignored the Ombudsman and missed the agreed compensation payment deadline by several weeks. I have now received two cheques one of them for only £23 sent by registered mail at a cost of £6.50 for one account. I received a second larger cheque for another account about a month later, again sent by registered post under duress from the Ombudsman and this included an additional £50 fine imposed for late payment. Honestly, behind the facade of the fancy website the back office is a mess. As such, I have limited the number of accounts and amount of funds I hold with the company.

All the best, Si


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timarr 10:33am 21 of 22
1

In reply to post #426148

Hi Si

That's interesting. My experience of AJ Bell is quite different and, of course, we're all biased by our experiences. What we can definitely say is that one of us is a victim of base rate neglect :-/

As for Somero, while I'd agree it's odd that AJ Bell don't have a streamlined process for dealing with this given that they don't I can't see that this constitutes a case for doing so. Rather Somero need to move off late sixteenth century technology - although I suppose that gives them the problem of what to do with their crack team of quill wielding cheque writers :-)

timarr

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simoan 11:33am 22 of 22

In reply to post #426173

That's interesting. My experience of AJ Bell is quite different and, of course, we're all biased by our experiences.

Yes, very true, but you only really find out how good a company is when something goes wrong and/or how they act on behalf of their customers. I have been with company right back to the original Sippdeal/ James Brearley days and have had numerous problems with them over the years including losing entitlement to right issues etc. because of their poor service.

The fact remains that they sucked in customers with fee free accounts and then imposed a new fixed charging structure on those accounts whilst still imposing exorbitant transfer out/exit charges. I don't know about you but I don't like feeling like a frog luxuriating in a pot of warm water... To make matters worse and infuriate me even further, we received a letter from Andy Bell telling us that the changes were "revenue neutral", talk about insulting peoples intelligence! And every other broker who has ever done this (to my knowledge) has provided a fee free transfer out period, but not AJ Bell. 

As for Somero, while I'd agree it's odd that AJ Bell don't have a streamlined process for dealing with this given that they don't I can't see that this constitutes a case for doing so. Rather Somero need to move off late sixteenth century technology - although I suppose that gives them the problem of what to do with their crack team of quill wielding cheque writers :-)

I thought that's what I said? :-) IMHO part of this problem lies with Somero Enterprises Inc (LON:SOM) paying dividends by  USD cheque. It's simply not good enough as we enter 2019.

All the best, Si

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