Sun Life and Manulife Cut DRiP Fees

Last week, Sun Life Financial and Manulife Financial both announced that they were cutting fees on the dividend reinvestment and share purchase plan (DRiP/SPP). That is good news for Canadian DRiP investors, as these two companies used to have the highest fee structure in Canada -- so high that it was actually cheaper to use discount brokers to purchase shares.

The fees on dividend reinvestment and on additional purchases were completely eliminated, bringing these plans to par with Canadian banks that offer DRiP/SPPs.

Both companies also announced discounts on reinvested dividends (2% for SUnlife, 3% for Manulife).

These moves will the companies preserve (reinvestment discount) and raise additional capital at a relatively low cost (no fees on purchases). By now, this is a familiar song for investors in these days of the recession.

I have already made arrangements to add both companies to my DRiP portfolio. Only time will tell if these plans remain intact once the recession is over.