Direct Stock Purchase Plan (DSPP): How Aussies Can Invest Directly in Shares

For decades, buying shares meant going through a broker, navigating their platforms, and paying commissions. But in 2025, an old idea is finding new fans among savvy Australians: the Direct Stock Purchase Plan (DSPP). With global share trading on the rise and fee-conscious investors seeking alternatives, DSPPs offer a streamlined, low-cost path to building a portfolio—sometimes even letting you buy fractional shares in major overseas companies.

What Is a Direct Stock Purchase Plan?

DSPPs allow investors to buy shares directly from a listed company, bypassing traditional brokers. Popular in the US and parts of Europe, these plans are now increasingly accessible to Australians, especially those interested in owning blue-chip stocks like Apple, Microsoft, or Tesla without hefty brokerage fees.

• No Broker Required: Investors enroll in a company’s DSPP, usually via its transfer agent, and purchase shares directly.

• Low or No Fees: Most DSPPs feature minimal set-up costs and low ongoing fees, making them attractive for regular, small investments.

• Automatic Investing: Many plans allow you to set up recurring purchases, helping to dollar-cost average into the market.

While DSPPs are rare for ASX-listed companies, hundreds of US companies offer them to international investors, including Australians. The 2025 trend? More fintech platforms are partnering with US transfer agents to make DSPPs accessible Down Under.

Benefits of DSPPs for Australians in 2025

Why are Australian investors looking at DSPPs in the current market?

• Lower Entry Barriers: DSPPs often let you start with as little as US$50–100, perfect for those building wealth gradually.

• Fractional Shares: Instead of buying a whole share (which can cost hundreds), DSPPs let you own a slice—ideal for high-priced US stocks.

• No Brokerage Commissions: With most Australian brokers charging $10–20 per international trade, DSPPs save you money, especially for regular purchases.

• Automatic Dividend Reinvestment: Many DSPPs allow dividends to be reinvested, compounding your returns over time.

• Global Diversification: With the ASX making up just 2% of the world’s share market, DSPPs are a gateway to international blue chips.

For example, if you wanted to buy shares in Coca-Cola or Johnson & Johnson, you could set up a DSPP account, deposit a small amount each month, and watch your holdings grow—without worrying about minimum trade sizes or high fees.

Risks and Practical Considerations

Despite their appeal, DSPPs aren’t for everyone. Here’s what Australians should watch out for in 2025:

• Limited Choice: You can only invest in companies that offer DSPPs—mostly large US firms. ASX companies rarely provide this option.

• Currency Exchange: You’ll be buying in USD, so FX rates and transfer fees can eat into returns. Some fintechs now offer better FX rates, but it’s worth comparing.

• Tax Complexity: Owning foreign shares means extra paperwork at tax time, especially with capital gains and dividend withholding taxes. The ATO’s 2025 guidance makes it easier to claim foreign tax offsets, but record-keeping is still crucial.

• Direct Ownership (No CHESS): Unlike ASX shares, DSPP holdings aren’t on the CHESS system. Your name is on the foreign company’s share register, but trading or selling may be slower compared to using an Aussie broker.

Recent changes in 2025, such as the expansion of the ATO’s myTax pre-fill for foreign income and improved FX transparency by fintechs like Stake and Superhero, have made DSPPs more user-friendly for Australians. However, always check if the DSPP you’re considering is open to non-US residents—some have restrictions or require extra ID verification.

How to Get Started with a DSPP

Ready to try a DSPP? Here’s a practical guide for 2025:

• Research Eligible Companies: Look for major US companies with open DSPPs. Websites like Computershare and Broadridge list available plans.

• Compare Costs: Review initial set-up, purchase, and ongoing fees. Some plans charge a small fee per transaction, while others are free for recurring investments.

• Set Up an Account: You’ll need proof of identity and a way to transfer AUD to USD—many Australians use Wise or OFX for low-cost FX transfers.

• Start Small and Automate: Consider starting with a modest recurring investment and opt for dividend reinvestment if available.

• Stay on Top of Tax: Keep records of all purchases, sales, and dividends for your tax return.

For example, an Australian investor in 2025 might open a DSPP with Procter & Gamble, invest $100 monthly, and have dividends automatically reinvested—building a global portfolio with minimal hassle.

The Verdict: Are DSPPs Right for You?

Direct Stock Purchase Plans are a compelling option for Australians seeking direct, low-cost access to global shares. While not a replacement for a diversified brokerage account, they’re perfect for disciplined investors who want to dollar-cost average into world-class companies. With fintech innovation and regulatory changes making DSPPs easier than ever, 2025 could be the year more Aussies add them to their wealth-building toolkit.