When you receive a dividend from a stock that you own, it typically arrives in your account as cash. Dividend Reinvestment Programs automatically reinvest those dividends into the securities that sent you the dividend, and can significantly increase your total return.
If your account is managed here, it will be automatically rebalanced about once a month. In effect, this means that we are continuously reallocating all new income and dividends regularly, so it’s unlikely that a mountain of dividend cash will build up in your account.
The practical implication of this for our clients is simple: you can opt into the program or not. Your account will be looked after either way.
