interactive investor scoops Shareholder Engagement Award

We were delighted to win the Association of Investment Companies (AIC) recent Shareholder Engagement Award, which was launched for the first time this year.

We were delighted to win the Association of Investment Companies (AIC) recent Shareholder Engagement Award, which was launched for the first time this year.

The award recognises the work that investment platforms do to facilitate and encourage shareholder engagement with investment companies, including voting, annual general meetings (AGMs) and corporate actions.

Judged by platform specialists, the lang cat, entrants were scored on shareholder voting, AGM participation, corporate actions, and documents and data.

We were praised by the judges for our commitment to shareholder engagement, including our broad range of educational materials as well as actively promoting the benefits and importance of shareholders exercising their rights.

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.”

Lee Wild, Head of Equity Strategy,interactive investor, says: “We feel strongly that we should promote the issue of investment trust AGMs and the importance of voting. Given investment trusts’ wide ownership amongst retail investors, we have a duty to make sure that retail investors’ voices and collective power are not drowned out by large institutions (who may not always have retail investors’ best interests at heart). Such is the level of exposure to investment trusts among our customer base, and given we are the second-largest DIY platform, we are in a good position to help customers exercise their collective power.”

Judging criteria

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?

There were some areas for improvement suggested for the whole investment platforms industry:

• 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.”