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?
SPONSORED FEATURES
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...

    Recruitment Genius: Call Centre Debt Collector - Multiple Roles

    £21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

    Guru Careers: Financial Director / FD / Senior Finance Manager

    Up to 70k DOE: Guru Careers: We are seeking an experienced Financial Director ...

    Recruitment Genius: Junior / Apprentice Sales Executives - OTE £50,000

    £11000 - £50000 per annum: Recruitment Genius: This financial company offer ma...

    Day In a Page

    Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

    US betrayal of old ally brings limited reward

    Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
    VIPs gather for opening of second Suez Canal - but doubts linger over security

    'A gift from Egypt to the rest of the world'

    VIPs gather for opening of second Suez Canal - but is it really needed?
    Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

    Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

    Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
    The male menopause and intimations of mortality

    Aches, pains and an inkling of mortality

    So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
    Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

    'How can I possibly be on the list with these writers I have idolised?'

    Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
    Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

    Bettany Hughes interview

    The historian on how Socrates would have solved Greece's problems
    Art of the state: Pyongyang propaganda posters to be exhibited in China

    Art of the state

    Pyongyang propaganda posters to be exhibited in China
    Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

    Vegetarian food gets a makeover

    Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
    The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

    The haunting of Shirley Jackson

    Was the gothic author's life really as bleak as her fiction?
    Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

    Bill Granger's seaside-inspired recipes

    These dishes are so easy to make, our chef is almost embarrassed to call them recipes
    Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

    Tourists are limp, leaderless and distinctly UnAustralian

    A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
    Blairites be warned, this could be the moment Labour turns into Syriza

    Andrew Grice: Inside Westminster

    Blairites be warned, this could be the moment Labour turns into Syriza
    HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

    The mystery of Britain's worst naval disaster is finally solved - 271 years later

    Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
    Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

    'I saw people so injured you couldn't tell if they were dead or alive'

    Nagasaki survivors on why Japan must not abandon its post-war pacifism
    Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

    The voter Obama tried hardest to keep onside

    Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen