Do you own the securities in your brokerage account? The advantages of direct registration.

Do you own the securities in your stock brokerage account?  Probably not.

If you read your stock brokerage account agreement closely you know that you do not really own the stocks in your account.  Stocks are held in 'street name'.  What you own is essentially a claim for a specific number of shares in the pool of those shares administered by your broker.  The broker has title to all the shares in the pool in their 'street name'.  This facilitates trading by enabling quick transfer of stocks from one account to another at the same broker and bundling of shares for purchase and sale.

There are two alternatives: direct registration and holding paper certificates.  Unfortunately most companies stopped issuing paper certificates several years ago.  

In summary, the relative advantages of holding securities at a brokerage in street name or as direct registration are:

Ownership Model	Street Name (Brokerage)	Direct Registration (Transfer Agent)
Insurance	SIPC up to $500k	No SIPC.  No FDIC.  Investee’s discretion
Fungibility	High: ownership transferred by broker	Medium:  must instruct broker to use Direct Registration System (DRS)
Investee-Investor communication	Administered by broker	Direct
Pledging securities as collateral	Medium	High
Creating a margin account	Easy	Not available
Receiving interest and dividend payments	Broker is added step in payment chain - delays possible	No delays
Administration regulated by	SEC	SEC
Record keeping	Book entry.  No paper.	Investee's Register.  No paper.
Corporate governance	Easier for investee to go dark with fewer registered owners.	More difficult to avoid mandatory disclosures.

In my situation the decision whether to direct register shares comes down to:
- do I want to keep track of yet another account, password, etc. at the transfer agent?
- how often and easily do I need to trade this security?
- what are the chances that my broker misappropriates shares in my account?

I do not need securities in my brokerage account as collateral for margin debt.  I have little confidence in SIPC insurance. 

More background and my sources can be read at http://rikgreeninvestorforum.blogspot.com/p/precious-metals.html

At this point, I am planning to direct register about half the shares in my core holding.  

Holding securities at brokerage firms can be risky.  Ask a former MF Global account holder.  All the brokers that I use also have banking businesses.  Who knows what the assets on the banking side are invested in.  Back in 2007, one popular internet broker had significant investments in subprime mortgages, for example.  Fortunately, this broker had more ethics and discipline than MF Global.