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Direct Stock Purchase Plan (DSPP)

A way for individuals to buy stocks directly from a company rather than through a brokerage

Written by

CFI Team

Published August 18, 2023

Updated June 28, 2023

What is a Direct Stock Purchase Plan (DSPP)?

A Direct Stock Purchase Plan (DSPP) is a way for individuals to buy stocks directly from a company rather than through a brokerage.

Typically, investors purchase stocks through brokerages, such as banks or online investment platforms. In this case, the brokerage acts as a middleman between the investor and the company, providing investors with access to a range of stock offerings on one platform.

However, brokerages typically charge commissions or currency exchange fees per transaction. Through a direct stock purchase plan, an investor can skip the middleman and purchase shares directly from a company. Although DSPPs minimize commissions, there are other drawbacks, such as purchase requirements and transfer fees.


A Direct Stock Purchase Plan (DSPP) is a way for individuals to buy stocks directly from a company rather than through a brokerage.

Through a DSPP, an investor can eliminate any brokerage fees associated with the purchase.

In a DSPP, the price of each share isn’t equivalent to the market price, but rather an average price over a period of time.

How Direct Stock Purchase Plans Work

Direct stock purchase plans offer an alternative to the brokerage model most commonly used in the buying and selling of stocks. By skipping the middleman, investors can invest directly in a company while avoiding any commissions that would be paid to the brokerage.

However, direct stock purchase plans are agreements between an investor and a single company. Therefore, each company may have different requirements regarding the purchase of shares. Examples of companies that offer direct stock purchase plans are Walmart, Starbucks, and Coca-Cola.

Similar to the brokerage model, investors initiate the direct stock purchase by transferring money from their checking or savings accounts, and the money is used to purchase shares. Unlike a brokerage, direct stock purchase plans typically enforce minimum investment requirements, which limit the minimum number of shares that can be bought in each transaction.

Also, the price of each share isn’t equivalent to the market price, but rather the average price over a period of time. Funds from investors are pooled and are used to purchase shares periodically. Once the shares are purchased, the plan administrator will issue the investor a certificate that states the number of shares purchased, dividends, and other relevant information.

Direct stock purchases are managed by transfer agents, which are third-party institutions that record transactions, issue certificates, and perform administrative duties. Some of the world’s largest transfer agents include Computershare Trust Company and American Stock Transfer & Trust Company (AST).

For institutional investors that purchase large quantities of shares, direct stock purchases may be beneficial because companies can offer discounts that are unavailable through traditional brokerage models.

Direct stock purchases can provide increased communication between the investor and the company. Some corporations may also offer employee stock ownership plans (ESOP), which allow employees to purchase shares at a discounted price.

Advantages of Direct Stock Purchases 1. Offers cost savings 2. Provides a simplified purchasing experience

Avoiding the brokerage model can also provide greater simplicity in the purchasing experience.

3. Promotes stronger investor relations

For the company itself, direct stock purchases can be beneficial because it promotes stronger investor relations. Since shares are purchased directly, the company can reach out to investors directly to promote and share information.

4. Prevents short-selling

Also, shares purchased through direct stock purchases cannot be shorted, which prevents short-selling and reduces price volatility.

1. Charges other fees

Although direct stock purchases eliminate brokerage fees, there are still other fees that can arise, such as account setup fees, transaction fees, or fees to sell.

2. Reduces portfolio diversity and limits trading options

Direct stock purchases are between an investor and a single company. While a brokerage can offer thousands of stock options, a direct stock purchase limits the investor to one stock. It reduces portfolio diversity and limits an investor’s trading options.

With direct stock purchases, it’s difficult to know the price of each share before purchasing as the prices are an average. This makes it difficult to time the market and more complicated for investors to sell.

Additional Resources

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Tiktok A Key Part Of Consumers’ Path To Purchase

A global research study finds TikTok is a key part of consumers’ path to purchase, where are increasingly discovering and buying new products.

The study aims to identify TikTok’s role in and perceptions across the retail consumer journey.

According to results of the study, the impact of TikTok is translating outside of the platform and into the real world.

TikTok is reshaping the traditional path to purchase and driving sales at scale.

Rather than a sales funnel, the path to purchase on TikTok is described as an “infinite loop.” That means there’s no defined start an end point.

Instead, consumers enter, exit, and re-enter the sales journey at different stages based on their needs and wants.

It’s important for marketers to be aware of the results of this study, as TikTok’s influence over consumer purchase decisions will likely only go up from here.

Here are the top highlights of the study to take note of.

Key Highlights From The Study On The TikTok Sales Journey

In the following sections you’ll find a roundup of key data points from the TikTok Marketing Science Global Retail Path To Purchase Study, conducted by Material.

TikTok User Statistics

These stats highlight users’ perception of TikTok, along with their wants and needs:

44% of daily TikTok users want branded content to be fun and entertaining.

49% of users say TikTok is a source for discovering something new.

35% of users say TikTok is a source for learning something new.

29% of users say TikTok is a source for inspiration.

These stats highlight the consumer behavior of TikTok users:

Users spend 14% more when TikTok is part of the purchase journey

37% of users discovered something on TikTok and immediately went to buy it.

35% of TikTok users buy something they see on the platform.

29% of users say they weren’t able to buy a product they discovered on TikTok because it was sold out.

39% of TikTok users say “lifting spirits” is a key factor when they decide to buy a product.

TikTok Users Post-Purchase Behavior

The following stats highlight what TikTok users do after they buy a product they discovered on the platform:

1 in 5 users make how-to or tutorial videos on TikTok.

1 in 4 users created a post showing off a product they bought.

1 in 5 users DM a brand.

1 in 4 users followed a brand.

TikTok Users Compared To Other Social Media Users

Compared to users on other social media platforms, TikTok users are:

1.5x more likely to immediately go out and buy something they discovered on the platform compared to other platforms’ users.

1.5x more likely to convince a friend or family member to buy a product they’ve seen on the app

2.4x more likely to create a post and tag a brand after buying a product.

1.3x more likely to feel excited or euphoric about product purchases.

1.4x more likely than users on other platforms to research products and brands they discover.

For more data on TikTok’s role in consumers’ path to purchase, see the full study.

Source: TikTok

Featured Image: Ascannio/Shutterstock

What Is A WordPress Support Plan?

A WordPress Support Plan is one of the necessities of running a WordPress-powered website. Your website will experience numerous ups and downs. To ensure safety and data protection, you need to prepare for eventualities like data breaches due to hacks. A WordPress Support Plan ensures that your site doesn’t suffer the crippling effects of such intrusions.

What is WordPress?

Technically, WordPress is software. It’s a content management system (CMS) that simplifies numerous aspects of managing a website. Even for those with no knowledge of coding or computer science, a CMS like WordPress makes it easy to create and run a website.

WordPress is a type of CMS that is classed as ‘open-source.’ This means that anyone can access it and modify the source code as they see fit. This characteristic, among other things, has made WordPress a popular tool for building websites. Such is WordPress’ popularity that nearly 45% of all websites on the internet are powered by it.

Hacking is a constant threat for many website owners. The fact that WordPress powers many websites means that hackers are constantly trying to beat its system.

A WordPress Support Plan is a solution to such challenges.

Think of a WordPress Support Plan as regular housekeeping for websites. It is a series of regular maintenance checks to ensure that a website runs smoothly. It is performed by a web developer and involves ensuring that all of a website’s content is backed up, among other things. Depending on the arrangement, these tasks necessary for regular website maintenance are performed daily, weekly, or monthly.

Do You Need a WordPress Support Plan?

A WordPress Support Plan is an all-inclusive package designed to ensure the smooth running of your site. You can carry out website maintenance by yourself. However, this can be very challenging if you are not a certified web developer. Website maintenance is an arduous task, requiring a thorough grounding in numerous technical aspects of web building. One mistake could be very costly in the long term. For example, if you’re running an e-commerce website, failing to update the proper plugins could have serious financial consequences. This is one of the reasons why you should always have a professional web developer perform maintenance checks for your website. A reliable WordPress Support Plan provides just that.

Essential Requirements of a WordPress Support Plan

Regardless of whether you choose a daily, weekly, or monthly type of WordPress Support Plan, the following are must-haves:


Keeping your website updated is crucial to its proper functioning. Among the several things necessary for this are plugins. Plugins are pieces of software. They upgrade and improve the functionality of an existing application on a website. Sometimes, they add new features to a site.

Getting the right plugins should be part of any WordPress Support Plan. In addition to plugins, the update should also include security fixes and the latest themes. A common reason why WordPress websites get hacked is because of outdated plugin versions and features. A good WordPress Support Plan should handle all such updates.

2) Backups

Website backup is crucial to ensuring that there is no chance of irreversible data loss. A good WordPress Support Plan should have secure and regular backup systems, ensuring that any data breaches or third-party intrusions do not result in catastrophic data loss. The backup can be daily, weekly, or hourly. Ideally, this should be to a remote server that is completely isolated from the website.

3) Monitoring

Monitoring a website should be a 24-hour thing. This is because issues can arise at any time of day or night. An effective WordPress Support Plan should have a system of round-the-clock monitoring. This ensures that issues can be quickly identified and handled before they become serious, regardless of the time of day or night.

4) Human Checks

A common theme in many website maintenance procedures is using bots. These applications run automated updates. While this may seem like a time-saving measure, it can have its drawbacks. For example, such blanket update procedures can disrupt the functions of certain aspects of a website that are critical for user-friendliness. Unless a live person checks them, such errors can go unnoticed, leading to the disruption of some website functionalities. A reliable WordPress Support Plan should include human checks after every update to ensure that there is uniform compatibility without disruptions to any functionality.

5) Logging System

How To Set Up And Enable Direct Deposit On Cash App

Are you an avid Cash App user? Maybe it’s time to take the relationship with the app a bit further. Instead of transferring money from your bank to the app, your employer can send it straight to Cash App. Today we’ll show you how to set up and enable direct deposit on Cash App.



Cash App direct deposit requirements

How to automatically set up direct deposit on Cash App

How to manually set up direct deposit on Cash App

Editor’s note: We used a Google Pixel 7 running Android 13 and an Apple iPhone 12 Mini running iOS 16.5 to assemble these steps to set up and enable direct deposit on Cash App. Some things may look slightly different depending on your hardware and software version. Also, we used iPhone screenshots to showcase the instructions, as Android blocks screenshots on some important pages within Cash App.

How to automatically set up direct deposit on Cash App

Are you ready to set up direct deposit on Cash App? Let’s start with the easiest method, which is using the Automatic Setup. Just keep in mind this method doesn’t work with all employers. The employer must sign up for the service, so it primarily works with larger, popular companies with many employees.

Launch Cash App.

Go into the Money tab.

Tap on Direct Deposit.

Under Automatic Setup, tap on Get Started.

Find your employer.

Follow the instructions. You’ll need to log into your account and likely provide some extra info, which may differ between companies.

How to manually set up direct deposit on Cash App

If you can’t find your employer in the Automatic Setup, you will need to fill out a direct deposit to hand to your employer. Here’s how to do this.

Launch Cash App.

Go into the Money tab.

Tap on Direct Deposit.

Under Manual Setup, tap on Fill out a form.

Tap on Create New Form.

Tap on Continue.

Enter your employer’s name and hit Continue.

Select how much of the paycheck you want to deposit to Cash App. You can pick between Full Paycheck, Enter Percentage, or Enter Amount.

Select Next.

Draw your signature and select Next.

You can now choose between Email Form or View Form. Deliver the form to your employer using your method of preference.

It may not even be necessary to fill out a form. Many employers simply ask for your account information, and they handle all the work for you. We have a guide on how to find your Cash App routing and account number, if you need some help locating your account details.


Cash App will eventually provide its direct deposit terms of service, which you’ll need to read and accept. This is essentially how you enable direct deposit, but the feature isn’t really turned off. You just need to accept Cash App’s terms to use it. Cash App will show you the prompt when it deems necessary, likely when you’re trying to set up direct deposit on Cash App.

Direct deposit times vary by employer, system used, account history, and other factors. As a general rule, direct deposits seem to arrive sometime within the scheduled date, though, and sometimes the day after. Many seem to agree this happens sometime in the middle of the night or very early in the morning. Additionally, Cash App may make the money available two days before if you’ve built a history using direct deposit with the app.

Cash App direct deposits are usually available within a day or two after their scheduled date. That said, there can be delays. Cash App mentions it can take as long as five days for the funds to become available.

Factors that may affect your direct deposit on Cash App include the submission time, account history, and system delays. You may also want to verify your account details with the employer, as mistakes can happen.

What Is A Stock? A Beginner’S Guide


A claim over a company’s assets and its ownership

Written by

Andrew Loo

Published March 3, 2023

Updated May 13, 2023

What is a Stock?

When a person owns stock in a company, the individual is called a shareholder and is eligible to claim part of the company’s residual assets and earnings (should the company ever have to dissolve). A shareholder may also be referred to as a stockholder. The terms “stock,” “shares,” and “equity” are used interchangeably in modern financial language. The stock market consists of exchanges where investors can buy and sell individual shares of a company.

Benefits of Owning Stocks

There are many potential benefits to owning stocks or shares in a company.

1. Claim on assets

A shareholder has a claim on assets of a company it has stock in. However, the claims on assets are relevant only when the company faces liquidation. In that event, all of the company’s assets and liabilities are counted, and after all creditors are paid, the shareholders can claim what is left. This is the reason that equity (stocks) investments are considered higher risk than debt (credit, loans, and bonds) because creditors are paid before equity holders, and if there are no assets left after the debt is paid, the equity holders may receive nothing.

2. Dividends and capital gains

A stockholder may also receive earnings, which are paid in the form of dividends. The company can decide the amount of dividends to be paid in one period (such as one quarter or one year), or it can decide to retain all of the earnings to expand the business further. Aside from dividends, the stockholder can also enjoy capital gains from stock price appreciation.

3. Power to vote

Another powerful feature of stock ownership is that shareholders are entitled to vote for management changes if the company is mismanaged. The executive board of a company will hold annual meetings to report overall company performance. They disclose plans for future period operations and management decisions. Should investors and stockholders disagree with the company’s current operation or future plans, they have the power to negotiate changes in management or business strategy.

4. Limited liability

Lastly, when a person owns shares of a company, the nature of ownership is limited. Should the company go bankrupt, shareholders are not personally liable for any loss.

Risks of Owning Stock

Along with the benefits of stock ownership, there are also risks that investors have to consider.

1. Loss of capital

There is no guarantee that a stock’s price will move up. An investor may buy shares at $50 during an IPO, but find that the shares move down to $20 as the company begins to perform badly, for example.

2. No liquidation preference

When a company liquidates, creditors are paid before equity holders. In most cases, a company will only liquidate when it has very little assets left to operate. In most cases, that means that there will be no assets left for equity holders once creditors are paid off.

3. Irrelevant power to vote

While retail investors technically have voting rights in executive board meetings, in practice they usually have very limited influence or power. The majority shareholder typically determines the outcome of all votes at shareholder meetings.

Modern Stock Trading

What Affects Share Prices on the Stock Market?

There are many factors that affect share prices. These may include the global economy, sector performance, government policies, natural disasters, and other factors. Investor sentiment — how investors feel about the company’s future prospects — often plays a large part in dictating the price. If investors are confident about a company’s ability to rapidly grow and eventually produce large returns on investment, then the company’s stock price may be well above its current intrinsic, or actual, value.

Two of the most examined financial ratios used to evaluate stocks are the following:

Revenue growth

Earnings growth

Revenue growth tells analysts about the sales performance of the company’s products or services and generally indicates whether or not its customers love what it does. Earnings reveal how efficiently the company manages its operations and resources to produce profits. Both are very high-level indicators that can be used as references on whether or not to purchase shares. However, stock analysts also use many other financial ratios and tools to help investors profit from equity trading.

No matter what your job in the financial industry, you will be involved with stocks in one way or another.

Additional Resources

Stock Market Guide

Investing for Beginners

Exchange-Traded Funds (ETFs)

See all equities resources

Spotify Family Plan Crackdown Threatens Account Sharing

Spotify family plan crackdown threatens account sharing [Updated]

Spotify may crack down on friends sharing subscriptions to its more cost-effective family plan, demanding GPS location data from some of its users. The streaming music provider has offered a family plan since 2014, making it more competitive in mid-2023 by allowing up to six people to share a premium subscription for $14.99 per month.

That’s far cheaper than it would be for each of those six people to have an individual Spotify Premium subscription of their own, which cost $9.99 per user. Each family plan user gets their own recommendations, playlists, and saved music.

What Spotify hasn’t been doing, at least until now, though, is checking to see if those family plan users are actually, well, a family. As a result, it’s not uncommon to see a group of friends sharing a single family plan because it makes more financial sense that way. Now, though, Spotify is seemingly cracking down, using a little-known loophole in its terms of service.

Turns out, Spotify always had some limits on its family plan, it just wasn’t really enforcing them. “All account holders must reside at the same address to be eligible for the Premium for Family Plan,” the company’s terms and conditions read. If they don’t, Spotify reserves the right to terminate the plan, at which point everybody reverts to the feature-limited Spotify Free tier.

That confirmation process won’t just take subscribers’ word for it, either. Instead, it uses GPS to pinpoint where each person is. That, many have pointed out, has privacy implications, though Spotify insists that it “will only use your GPS data to verify your location and nothing else.”

Subscription sharing is, undoubtedly, eating into potential profits of services like Spotify. After all, it could be making $59.94 each month from six regular Spotify Premium subscribers, rather than them paying just $2.50 per month. However it also raises questions about the nature of modern families, and whether it’s realistic to expect everybody who is considered a “family” to also reside in the same location.

“Spotify is currently testing improvements to the user experience of Premium for Family with small user groups in select markets,” the company said in a statement. “We are always testing new products and experiences at Spotify, but have no further news to share regarding this particular feature test at this time.”

It’s not the first move Spotify has made in recent months to limit people gaming its service. Back in March, it began clamping down on Spotify Free service users who were relying on ad-skipping apps to bypass the promotions used to subsidize their listening. The company claimed that around two million users were relying on those unofficial apps to game its system.

Had Spotify named its family tier “Spotify Household,” it could probably have gotten around this controversy – at the cost of a somewhat more awkward name, mind. Still, if it decides to enact the restrictions its terms and conditions permit, it’s questionable whether subscribers ousted from family plans will necessarily sign up to an individual premium subscription afterwards, rather than look elsewhere to less restrictive services.

Update: Spotify has ended its “test” requiring GPS location confirmation.

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