FTSE 100 firms shutting out DIY investors with corporate mumbo-jumbo, investment platform warns
FTSE 100 bosses are shutting out amateur investors from the market by using corporate waffle and overly technical language in their shareholder communication, a top investment platform has warned.
Ministers and investment platforms have been looking to push individual investors towards public markets again as part of a wider drive to reinvigorate UK listed companies and allow Brits to reap the return of the equity markets.
The government and financial regulators have rolled out a number of technical tweaks to the public market in recent months in a bid to encourage individual investors to buy up shares in Britain’s listed firms.
However, one of the country’s top investment platforms has today taken aim at top bosses for hampering the efforts.
In a letter to FTSE 100 chairs today, Interactive Investor, the UK’s second biggest investment platform, said firms too often used corporate jargon that was too difficult for the average retail investor to understand.
“It matters, because badly written shareholder notifications are a barrier to engagement, lead to poor decisions and create stress,” Richard Wilson, chief of Interactive Investor, said.
“Resolutions like the environment, pay, pre-emption rights, or investment trust continuation votes can really matter, and they can also have an impact on our customers’ wealth,” he said.
“While companies are regulated in the way they speak to shareholders, let’s do more to engage in a retail friendly way,” he added.
Interactive Investor, which has some £50bn assets under administration and over 400,000 customers, has thrown its weight behind recent campaigns to force FTSE 100 and other listed firms to be more inclusive in their shareholder engagement.
The firm backed a recent effort from M&S chair Archie Norman to boost shareholder democracy by allowing firms to hold digital-only annual general meetings so all shareholders can weigh in on company strategy. Under current rules, firms have to declare a location for a meetings.
Britain’s biggest investment and savings platform Hargreaves Lansdown has also thrown its weight behind the campaign.
However, Norman saw his online-only push backfire recently as shareholders reacted with rage at M&S’s own digital-only format.
In its letter today, Interactive Investor said it would also roll out a scorecard on AGM experience to hold companies to account.
The efforts come amid a wider push from government to get retail investors back into the market.
City minister Andrew Griffith called “come back Sid” to a conference earlier this year in a reference to the 80s campaign to get investors to buy up shares in the newly privatised British Gas.
“We should all talk a little bit more about the positives of investing in generally good growth companies, well managed or with good dividends.” he told CityAM in an interview in June.