The award recognises the work of investment platforms to encourage shareholder engagement with investment companies.
The Association of Investment Companies (AIC) has announced that interactive investor has won its Shareholder Engagement Award 2021.
The AIC launched the award this year to recognise the work that investment platforms do to facilitate and encourage shareholder engagement with investment companies, including voting and taking part in annual general meetings (AGMs) and corporate actions.
The Shareholder Engagement Award was judged by platform specialists, the lang cat, with entrants scored in four main categories, namely shareholder voting, AGM participation, corporate actions, and documents and data.
The winner interactive investor was praised by the judges for its commitment to shareholder engagement, with the platform providing a broad range of educational materials as well as actively promoting the benefits and importance of shareholders exercising their rights. This is having an impact, with a gradual increase in shareholder engagement on the platform.
The other entrants, AJ Bell, Charles Stanley and Hargreaves Lansdown also won praise from the lang cat for their submissions. The judges commented that:
- AJ Bell has an online system that makes it simple for investors to vote, and notifications sent to investment company shareholders are clear and well thought out.
- Charles Stanley provides a wealth of information to investors to help them exercise their rights, including easy access to the latest stock exchange announcements.
- Hargreaves Lansdown has a clearly defined process in place and notifies all affected customers via email or post, as well as providing an online election facility.
The judges also suggested some general areas for improvement among the platforms, such as:
- making voting processes less manual (for example by removing the need for secure messaging);
- moving from ‘opt-in’ to ‘opt-out’ systems to ensure customers are kept informed about their shareholder rights unless they choose not to receive notifications; and
- notifying customers of all voting rights and AGMs, not just corporate actions.
Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “We launched this award because platforms have a vital part to play in ensuring that their customers who hold investment company shares can exercise their rights. We’re really encouraged that these four big hitters in the platform world submitted entries and all provided evidence that they are working to facilitate and encourage shareholder engagement. Though there can only be one winner, we would like to congratulate all four entrants for their efforts in this area and look forward to hearing about their further progress.”
Chris Bredin, Analyst at the lang cat, said: “Throughout the process we were thoroughly impressed with the responses from the entrants and by the clarity with which they explained the process investors need to follow. We’re also encouraged by the positive steps platforms are making towards facilitating and encouraging shareholder engagement. From the clear, concise notifications investors receive, to positive marketing campaigns and slick online voting processes; these platforms are stand-outs in helping investors exercise their rights.
“Exercising shareholder rights by voting and attending AGMs is a crucial part of investment company ownership; it helps drive the direction the company is travelling and so, ultimately, investment returns. Credit is due to the AIC in promoting engagement in this area and huge credit to the entrants to this award in laying it all out there and committing to future developments in this area. We would hope to see an increase in proactive engagement with investors in future years including making the process to vote/attend AGMs as simple as possible; the fewer barriers in place for an investor, the more likely it will be that they engage.”
Richard Wilson, CEO of interactive investor, said: “We would like to thank the lang cat and the AIC for shining a light on the neglected issue of shareholder democracy through these awards. We are delighted to have won this award but are under no illusions that we need to do more.
“Together, investment company retail shareholders can stand up and be counted alongside larger institutions, who may not always have their interests at heart. These awards also do a service to retail shareholders beyond the investment company sector, who make up a big proportion of UK plc.
“Investment platforms owe it to their customers to take shareholder engagement seriously and help them to exercise their collective power.”
The award was open to direct-to-consumer (D2C) investment platforms. The judging focused on four main areas:
- Shareholder voting. How well does the platform facilitate shareholder voting?
- AGM participation. How well does the platform facilitate participation in annual general meetings (AGMs) for shareholders of investment companies?
- Corporate actions. How efficiently and effectively does the platform notify shareholders about corporate actions, and enable them to respond where necessary?
- Documents and data. How well do platforms display investment company documents (such as annual reports) and data?
The award will be presented at an AIC media awards dinner on 21 September.
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Notes to editors
- The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment. Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 364 members and the industry has total assets of approximately £265 billion.
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