What is a Nominee?
A nominee is a person or entity that takes possession of securities or other assets for the purpose of making transactions on behalf of the owner of the securities or other assets.
How Does a Nominee Work?
For example, let's say that John Doe owns several positions in about 200 companies in his brokerage account. He has collected these positions over the past 10 years of hislife, and he's ready to let someone else make the buy and sell decisions every day.
John sets up a nominee account and transfers all of his holdings to that account. In a nominee account, theare no longer in John's name, though he is the owner of the assets. This allows the brokerage firm to buy and sell the assets in the account without John's written permission for every trade. John still gets the dividends from the , and he still gets to vote his when it's season.
Why Does a Nominee Matter?
Nominee transactions make transactions happen faster by allowing people or entities to act as agents for other people and thus conduct business in fewer steps.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
Before getting a mortgage loan, make sure you know exactly what each of these five terms means... ...Read More →
You probably remember the Beatles' famous lament “will you still need me, will you still feed me when I'm 64?" But the kind of anxiety many people experience about aging should extend...Read More →
We all have our bad spending habits: a $3 latte in the morning, an expensive taxi fare now and then, a cheap piece of jewelry when we're down in the dumps. We're all for...Read More →