Derek Pain: Forcing the electronic option is a dereliction of a company's duty
No Pain, No Gain
Saturday 30 October 2010
Traditional investors are under pressure to bow before this electronic age. I have complained before about the devious ways that are adopted to prompt shareholders to give up their entitlement to receive hard copy communications and dividend cheques. Thankfully, the campaign waged so beguilingly a few years ago to abolish paper share certificates seems to have died the death. I expect it will be resurrected before too long.
To save money, quoted companies and the City would like all shareholders to rely on their computers for information, including annual reports which were once regarded as powerful publicity mediums. There are also continuing moves to encourage electronically transmitted dividend payments direct to a shareholders' banks instead of posted dividend cheques. Whereas it is possible to charge investors more if they request certificated deals when buying shares it is not quite so easy to extract cash from those who want printed reports and dividends through the post.
Many quoted companies and their City cohorts rely on subtle methods to obtain compliance. For example, most shareholders who want to retain printed reports have to make contact with the company or its registrar. Surely, it should be those who wish to change the system and go on-line who should make such an effort? After all, why should "no change" require a declaration while those opting for the electronic switch sit back and take no action? It seems a devious attempt to capitalise on the inertia of mainly small investors. Such methods represent a dereliction of a company's duty to its shareholders.
Dividend cheques, which allow the recipient a choice of accounts, also get the hard-line treatment. An example is provided by Lighthouse, the accountancy group that is a constituent of the No Pain, No Gain portfolio. Company secretary Mark Ross, in a letter accompanying the printed interim report, says dividends will be paid directly to shareholders' banks if the registrar holds the necessary authority. He adds: "Should that authority not yet be in place, then the documentation enclosed with the warrant and tax voucher will set out the requirements to be followed in this regard". No mention that cheques are still part of the system. Admittedly, they are under some threat of extinction because usage is declining. But in the numbers game, the indisputable fact that, often, one cheque represents half-a-dozen transactions is conveniently ignored. The VAT authority's strange decision not to accept cheques but only on-line payments is another example of the intolerable pressure now being inflicted on traditionalists.
It is, of course, small and in some instances less sophisticated investors who suffer in the face of this electronic blitz. Major shareholders and professional investors are able to take care of themselves and, I imagine, already conduct many operations on line and in the case of private investors endure the indignities of nominee accounts.
I suppose age is a factor. It is we old'uns who dislike change. I, one of those to get George Osborne's blessing to continue to receive a free TV licence, do not wish to accept on-line dominance. The internet seems fraught with danger which is underlined by the weekly news diet of villainous on-line shenanigans. It is not my desire to dissuade any investor from embracing the internet and all that goes with it. But I feel those who do not want to should be allowed, perhaps even encouraged, to carry on the old-fashioned way. Such a Luddite approach is not popular in the City.
The portfolio is a buy-and-hold investor. It favours hard copy and dividend cheques. That is not to say it ignores the internet. I frequently log on to the excellent ADVFN service and the Plus market as well as other facilities. But I have no desire to trade shares or bank on-line.
There is evidence that many don't want to embrace computers. Who knows? Perhaps the Vince Cable initiative for a corporate rethink will address the problems of harassed investors. I doubt it.
The portfolio has dumped Nighthawk Energy at 14p. The selling tide is too strong to resist. More next week. Another constituent Private & Commercial Finance indicated half-year profits would be in line with expectations.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Day In a Page
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens