Shares can perk you up

Most companies are reluctant to give shareholders freebies and discounts, but analysts believe they could be a valid way of keeping and attracting them.

If you invest in equities, you probably do so because you hope the price will go up and you will make a nice fat profit. Fair enough - why else would you bother? But there is another advantage to buying some shares. A few companies offer handy freebies which can range from anything from half-price magazines to £1,000s off a new home. In fact a few, like P&O's preference shares which offer half-price tickets to France to their shareholders, find their shares are bought primarily for the perks.

If you invest in equities, you probably do so because you hope the price will go up and you will make a nice fat profit. Fair enough - why else would you bother? But there is another advantage to buying some shares. A few companies offer handy freebies which can range from anything from half-price magazines to £1,000s off a new home. In fact a few, like P&O's preference shares which offer half-price tickets to France to their shareholders, find their shares are bought primarily for the perks.

Originally companies introduced perks to shareholders to keep them loyal and stop them selling precipitously. But comparatively few now do it and many of those who do only offer small vouchers or mini-discounts, which makes one wonder why they bother.

Boots the Chemist gives out a measly £10 for the whole year; Bemrose give a 15-month diary (be still my beating heart), and Moran Holdings, in a fit of extreme generosity, send shareholders an exciting tin of tea once a year. But at least they bother to send something. Many companies offer no incentive at all, which, analysts increasingly believe, is short-term thinking.

Justin Urquhart Stewart of Barclays Stockbrokers says: "In the past it hasn't really been worth it for most companies. But now, with more electronic shareholding, the cost of maintaining a shareholder is dropping significantly from around £15 or £25, as it was before, to as low as 50p or £1, as it is now. So suddenly the individual shareholder, instead of being a burden to the company, can be seen as something positive. I think more companies will find that they want even more of them and will have to think of other ways of attracting and keeping them."

Retired lecturer Fred Hunter from Surrey has a number of shares in his portfolio that have provided useful freebies as well as profit, but he believes companies should take more interest in their private shareholders. "I think they should not only give more perks but also different ones so shareholders feel some relationship to the company. Not enough companies give you freebies of their own products. They really regard their AGM as a bit of a trial but their marketing people should realise their potential as a selling point," he says.

Mr Hunter has benefited from shares in the Queen's Moat chain of hotels where he put up a family for virtually nothing for a wedding thanks to a 10 per cent discount, a group deal and cash vouchers. He also plans to use his 10 per cent discount with Thompson Tours (although many travel agents would offer that anyway) and the possibility of £1,000s off a new Barratt home if he and his wife decide to move.

Of course, not all companies are in a position to offer perks. Few people would be excited by the prospect of a free lump of steel if they invested in Corus, for example. But in an increasingly competitive market where companies are vying for customer loyalty as well as shareholder interest, it seems clear that many are missing a trick.

"Take companies like Tesco," says Justin Urquhart Stewart, "they have a large loyalty scheme. Lots of people participate in it. They get given vouchers every few months to get a few pence off a tin of baked beans. But why not convert some of those vouchers into shares? You'll probably get a lot more loyalty that way. After all it's not new, it was done 150 years ago when it was called the Co-op."

Even if you do have shares in a company that offers freebies, they don't like to make it easy for you to receive your perks. Typically they will require you to have a certain amount of shares, so it is no good buying one share and hoping to cash in on the perk. There might also be a qualifying period. Also, with internet dealing, a lot of stockbrokers deal via nominee accounts where they hold the shares on your behalf and their name is on the share rather than yours, which means they get the perks and you don't. In such cases, you need to ensure your stockbroker operates a designated nominee account, where shares are designated as being in your name rather than the stockbroker's. If it is a pooled account they hold shares on everyone's behalf, and you probably won't get any advantages.

There are a number of perk-giving sharesthat are worth looking at for investment.

Jeremy Batstone of NatWest Stockbrokers says the house-building groups are very much in favour with them. Persimmon, Bellway, Barratt and Redrow all offer the equivalent of a few thousand pounds off a home if you have enough shares (generally a minimum of 1,000-2,500). "Transport stocks are mostly leading at the moment," he adds. You also get discounts on Avis's services if you have at least 1,000 of their shares. And you only need 200 BA shares to qualify for discount vouchers. Other perk-giving shares worth considering are Hilton Hotels and Park Group which does Christmas hampers.

Of course perks, like the value of shares, are subject to change at any moment so check with the registrar first to see if they are still being offered on the share you have your eye on. But if the share is good and the perk is not there any more don't let that stop you investing. As Justin Urquhart Stewart comments: "Perks aren't the icing on the cake, they're the cherry on the icing on the cake.That's all."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Assistant / Buyer

    £15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

    Recruitment Genius: Compliance Manager

    £40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

    Day In a Page

    Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

    'The economic collapse has happened. What is at risk now is democracy...'

    If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
    The science of swearing: What lies behind the use of four-letter words?

    The science of swearing

    What lies behind the use of four-letter words?
    The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

    The Real Stories of Migrant Britain

    Clive fled from Zimbabwe - now it won’t have him back
    Africa on the menu: Three foodie friends want to popularise dishes from the continent

    Africa on the menu

    Three foodie friends want to popularise dishes from the hot new continent
    Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

    Who will fill Donna Karan's boots?

    The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
    10 best statement lightbulbs

    10 best statement lightbulbs

    Dare to bare with some out-of-the-ordinary illumination
    Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

    Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

    Briton pumped up for dream meeting with world No 1
    Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

    Nick Bollettieri's Wimbledon Files

    It's time for big John Isner to produce the goods to go with his thumping serve
    Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

    Dustin Brown

    Who is the German player that knocked Nadal out of Wimbeldon 2015?
    Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

    Damien Martyn: 'England are fired up again, just like in 2005...'

    Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test
    Tour de France 2015: Twins Simon and Adam Yates have a mountain to climb during Tour of duty

    Twins have a mountain to climb during Tour of duty

    Yates brothers will target the steepest sections in bid to win a stage in France
    John Palmer: 'Goldfinger' of British crime was murdered, say police

    Murder of the Brink’s-MAT mastermind

    'Goldfinger' of British crime's life ended in a blaze of bullets, say police
    Forget little green men - aliens will look like humans, says Cambridge University evolution expert

    Forget little green men

    Leading evolutionary biologist says aliens will look like humans
    The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

    The Real Stories of Migrant Britain

    An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
    Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

    Dying dream of Doctor Death

    Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy