There is much to admire in the report released a few days ago by the think tank Center for Policy Studies (CPS) on the economic benefits of encouraging broader ownership.
In fact, it took me 37 years back when my father – Stan The Man – called and said he had just seen another ‘Tell Sid’ commercial on television for the imminent privatization of energy giant British Gas.
“Should I buy something or not?” he asked, sipping from a glass of Remy Martin (he liked his cognac). I told him to buy some stock.
It’s one of the few times he asked my advice (the proud man was Dad) – and it’s probably the only time he benefited financially from it. Dad did indeed go on to build his own investment portfolio. ‘Tell Stan’ made him an investor for most of his life.
While privatizations clearly don’t feature in the CPS report as a way to encourage broader shareholding among today’s adults, “Tell Sid” lives on.
Nick King, author of the report, believes the Treasury and the London Stock Exchange should launch a modern ‘Tell Sid’ campaign to get households to invest (rather than save) excess income.
Iconic: The Tell Sid campaign for the British Gas float in 1986 helped encourage people to invest in stocks for the first time
This would be good for people who could benefit from potentially better returns than the diddly squat they receive from money held in a savings account at their main bank. But it would also help the British companies that supported investors and, in turn, boost economic growth.
It’s not the only idea King comes up with. Other proposals to stimulate shareholding include a simplification of the Isa regime, whereby the distinction between cash and shares and shares of Isa’s will be abolished.
This, King says, would lead to fewer people opting for cash while making it easier for others to jump out of cash and into stocks.
King also suggests that the government create an investment fund for small investors to buy. It would be no different from mutual funds offered by asset managers in that the stocks it buys can go up or down in value.
But King argues that the government’s support for such a fund would give people more confidence to invest in it.
The government appears to be receptive to the ideas contained in this report, which can be read in full at cps.org.uk. Andrew Griffith, Secretary of the Treasury for Economic Affairs, applauded it, stating that ‘broader shareholding is good for savers, good for the economy and good for society’.
Treasury officials, it is understood, are drawing up plans for “Tell Sid Mark II.”
Some would rightly argue that increasing shareholding is not a priority right now: there are bigger issues to address, such as stubbornly high inflation and sticky utility bills.
But unless we start encouraging more investment in UK companies, our future as an economic powerhouse is in jeopardy.
If you have an opinion on the CPS report, please contact us.
The latest hot air from the insurance world
Cover walk: Rosie Murray-West
I could understand if an insurer turned to a homeowner who lives near the coast and said that changing weather patterns were responsible for an increase in their home insurance premium.
But it certainly hits the spot when it gives a London-based policyholder this reason why their renewal premium will be three times higher than last year.
Absolute nonsense.
The insurer in question is Esure and the policyholder is my colleague Rosie Murray-West. Esure told Rosie: ‘Following changes in weather patterns, we have assessed the risk of your property and your extension reflects this. We understand that it may be higher than expected.’
Maybe? A jump from £374 a year to £1,186? No, according to Rosie, it’s higher than expected, much higher. In fact, beyond the Richter scale.
For the record, Rosie lives in a subsidence-free house on a hill in South London. She can’t even see the River Thames from any of her top floor windows, so flooding isn’t a problem.
Esure said she might be able to get cheaper coverage by shopping around. Be able to? No, she did. She has now found an insurer willing to insure her home and contents for just over £400.
It seems that insurers are increasingly fooling us and trying in the hopes that some of us will blindly extend. Shop. Forever. Never trust an insurer to have your best interests at heart.
Premium Bond prices are rising again
The premium rate for Premium Bonds jumps to four percent next month, the seventh increase in a year.
It doesn’t guarantee you a price if you’re a bondholder because it’s all down to chance. For example, last week I won £50 (my first prize since March), while a dear friend with an asset nearly twice my size won nothing.
Premium Bonds: More Fun (and More Lucrative) Than Saving on a Barclays Everyday Saver Account by Paying One Percent
She’s a little pissed off. I’m quite shocked. I can’t wait to access my NS&I price checker app early next month to see if I can build a winning streak. More fun (and more lucrative) than saving in a Barclays Everyday Saver account and paying one percent.
Danger to investors from digital AGM
The company’s annual general meeting remains an important event in a company’s calendar. It’s an opportunity for shareholders to listen to – and get to know – those responsible for running the company they’ve invested in. They can even ask tough questions if they feel they deserve it, holding executive and non-executive directors to account.
But just like in almost every other aspect of our lives, the AVA is being digitized. Triggered by lockdowns during Covid, many companies are now streaming AGMs online, with shareholders asking questions via text or video and voting on major resolutions.
The digitization of the AGM means that more investors can listen to the meeting, which is a good thing as not everyone has the time to travel.
But it also makes the event more impersonal, allowing the company to control the course of events: for example, by determining which questions are asked. Instead of continuing the democratization of shareholders, it does the opposite: it exposes shareholders.
Retailer Marks & Spencer has said it will ‘think again’ after the digital AGM was widely criticized by shareholders a few days ago. While some investors attended in person, they were not allowed to communicate with M&S board members – and could only participate (e.g. ask questions) by using their phone or laptop. What a joke.
Of course M&S is not the only one making the AGM digital. Building Society Nationwide will hold a digital AGM later this month. Let’s hope M&S’s review will convince Nationwide to do the same ahead of next year’s AGM. Shareholders and members of mutual organizations must be embraced and listened to – while board members must accept that answering the sometimes tricky question is part of the territory.
Some links in this article may be affiliate links. If you click on it, we may earn a small commission. That helps us fund This Is Money and use it for free. We do not write articles to promote products. We do not allow any commercial relationship to compromise our editorial independence.