Hargreaves Lansdown launch online share voting service

Millions more individual investors with interests in DIY investment giant Hargreaves Lansdown will be able to more easily vote and participate in annual general meetings.

Hargreaves Lansdown is partnering with Broadridge to enable online proxy voting for its 1.75 million clients as investors seek greater control over ESG, executive compensation and other issues.

While HL has always offered a voting service, until now customers have had to manually identify relevant shareholder meetings and then call HL to provide their instructions for manual processing.

According to Hargreaves Lansdown, the new online service, which tracks similar movements from rival platforms eToro, AJ Bell and Interactive Investor, makes the process simpler and faster.

From November 2021, Interactive Investor made sure that all its clients could vote at AGMs by default.

Tom Lee, head of trade proposition at HL, said: “Retail investors have a greater interest in having the power to influence companies on key issues such as board diversity, climate change and sustainability.

“By providing a new digital capability for this self-service system, private investors are gaining more control over the governance of the companies they hold shares in and the democratization of markets.”

Companies ask shareholders to vote on things like the board of directors, approving dividends and how the company is run.

The vast majority of UK shareholders would love to attend an AGM, but nearly half are excluded due to widespread share ownership in accounts, which is how most investment platforms operate.

The new service includes 5,800 tradable shares, which is all UK and European stocks on the HL platform.

However, HL still does not allow voting on US stocks. This is because the stock usually comes packaged in a vehicle called Crest Depository Interest, which gives exposure to a foreign security.

The US CDIs held through Hargreaves are non-voting.

Investors must log into their account through the HL website – the service is not available through the app.

On the website, HL clients can click on ‘view shareholder meetings’ and provide a voting instruction through Broadridge.

Voting is on a per-account basis, which means that if investors have a share in Isa, Sipp and Fund and Shares account, three separate votes can be cast.

HL customers can also register to attend shareholder meetings through this service.

DIY investment platform eToro was the latest to launch a similar service in November last year, also in partnership with Broadridge.

Interactive Investor and AJ Bell have long been enabling customers to vote online and reserve their seats at company meetings.

Interactive Investor said it saw a 30 percent annual increase in the number of votes processed to 210,801 by 2022.

The number of AGM attendees, as measured by the number of unique accounts requesting letters of representation, doubled. But it added that ‘this was from a very low base’ – 720 letters were sent in 2022, up from 359 in 2021, 263 in 2020 and 651 in 2019.

It said: ‘This highlights the challenge UK PLC and the wider platform industry face if AGMs are to gain wider involvement.’

The desire to have a say on environmental, social and governance issues is also forcing more investors to vote.

Demi Derem, General Manager at Broadridge: “ESG requirements for retail investors have changed.

“Having a say in how the companies they invest in operate has become a major issue. Subsequently, shareholder voting functionality is more important than ever.

“We are proud to partner with Hargreaves Lansdown to provide their investors with an enhanced proxy voting experience.

“Increasing private investor participation is part of our ongoing mission to drive greater shareholder participation and improve overall corporate governance standards.”