Hargreaves Lansdown becomes latest DIY investing platform to launch online share voting service

• e-mail

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

Hargreaves Lansdown has partnered with Broadridge to bring online proxy voting to its 1.75million customers, as investors increasingly demand to have a say on ESG, executive pay and other issues. 

While HL has always offered a voting service, until now clients had to manually identify relevant shareholder meetings and then phone HL to cast their instructions for manual processing. 

The new online service, which follows similar moves by rival platforms eToro, AJ Bell and Interactive Investor, makes the process easier and quicker, according to Hargreaves Lansdown.

The service covers 5,800 tradeable equities - all UK and European shares on the HL platform

From November 2021, Interactive Investor made all its customers able to vote at AGMs as the default setting. 

Tom Lee, head of trading proposition at HL, said: 'Retail investors are taking a keener interest in having the power to influence corporations on important issues such as board diversity, climate change and sustainability. 

'Providing a new digital capability for this self-service system gives retail investors a greater say in the governance of the companies in which they hold shares and the democratisation 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 like to attend an AGM but nearly half are excluded because of widespread nominee account share ownership, which is how most investment platforms work.

The new service covers 5,800 tradeable equities, which is all UK and European shares on the HL platform.

However HL still does not allow voting on US holdings. This is because the shares are usually packaged into a vehicle called Crest Depository Interest, which gives exposure to an overseas security.

The US CDIs that are held through Hargreaves do not have voting rights.

Investors need to log in to their account using HL website - the service is not available through the app. 

On the website, HL customers can click 'view shareholder meetings' and provide a voting instruction through Broadridge.

Votes are placed per account, which means that if investors hold a stock in Isa, Sipp and Fund and Share Account, three separate votes can be placed.

HL clients can also register to attend shareholder meetings using this service.

HL said investors are taking a keener interest in having their say on important issues like climate change, board diversity and sustainability

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

Interactive investor and AJ Bell have been allowing clients to cast votes online and book their place on companies' meetings for longer.

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

AGM attendance, 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 emphasises the challenge UK PLC and the wider platform industry face if AGMs are to gain broader engagement.'

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

Demi Derem, general manager at Broadridge, said: 'Retail investor ESG requirements have changed. 

'Having a say in how the companies they invest in operate has become a big deal. Subsequently shareholder voting functionality has never been more important.

'We're proud to be working with Hargreaves Lansdown, to offer their investors an enhanced proxy voting experience. 

'Increasing retail investor participation is part of our ongoing mission to drive greater shareholder participation and improve overall standards around corporate governance.'