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Hargreaves Lansdown launches digital voting service

Hargreaves Lansdown has launched a digital service to make it easier for customers to cast their votes as shareholders, following moves by its competitors to boost participation among individual investors.

Clients of the UK’s largest retail investment platform can now vote and request to attend meetings online. The new system replaces a manual one which relied on emails, webchat or a phone call to the platform’s help desk.

“Individual retail investors hold around 50 per cent of UK shares yet their views on company performance, diversity and climate change are still very much overlooked,” said Tom Lee, head of trading proposition at the platform. “This solution gives our clients a greater say on the governance of these companies.”

The system, run by technical services provider Broadridge, eases the voting process for Hargreaves’s 1.7mn customers, who can invest in about 5,800 UK and EU shares on the platform.

Its move follows similar launches by rivals. Platforms including AJ Bell and Fidelity International already offer online voting services, with Fidelity partnering with Broadridge in 2018.

Two years ago Interactive Investor went further, automatically opting in all its clients to receive voting notifications. It observed a marked increase in votes processed and plans to add voting options to its mobile app later this year.

Richard Wilson, chief executive of Interactive Investor, said this month that the cost of improving access to voting was minimal and should not be a barrier for competing platforms.

Hargreaves Lansdown’s clients will not receive email alerts at this stage but will be automatically opted in to the service, with voting rights attached to around half of all tradeable equities on the platform.

“Many still hold the view that even after the implementation of enhanced services, the utilisation by end investors will be quite low,” said Demi Derem, a Broadridge general manager. Around 1 per cent of Hargreaves Lansdown’s users who were eligible to vote did so last year.

Derem said Hargreaves Lansdown’s new service would support customers with a growing interest in influencing the shape and direction of companies.

Shareholder groups have complained in recent years that the nominee system for votes, under which platforms appoint investors as proxies, leaves ownership unclear and has hampered retail investors looking to organise action on issues such as corporate pay and climate change.

Institutional investors with large shareholdings wield more influence over public companies’ policies than their retail counterparts. “Private investors only get to voice their concerns once every 12 months at AGMs,” Lee said. “unlike institutional investors who often have the ears of company boards.”

It remains a concern that platform customers may struggle to access information on voting, according to Chris Bredin at consultants Lang Cat Financial. He said steps to make voting easier were positive, but that platforms needed to create content highlighting the ability to vote and its importance.

Bestinvest, another platform, said voting was a lower priority for its retail clients than lower-cost financial advice. Though clients can request to vote via a secure message on the platform, it said most took a less active role in their investments.

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