Freetrade launches proxy voting feature for US-listed companies

Thousands more retail investors will be able to have their say on how the companies they invest in are run as Freetrade enables proxy voting for its users, This Is Money can reveal.

The DIY investment app has partnered with Say Technologies to bring proxy voting to its more than 1 million customers, opening up the AGMs of US-listed companies to an even larger pool of people.

In recent years, attention has focused on democratising investment as the pandemic ushered in a new generation of DIY investors, but little has been done to give retail shareholders a voice.

Freetrade will launch a proxy voting feature for US-listed companies in the coming weeks

Adam Dodds, founder and CEO of Freetrade, said: ‘We’ve seen a big rise in interest amongst a new generation of investors, and with that has come a desire to have their voices heard on the most important issues facing the companies that they’re backing. We’re thrilled to be able to offer them the opportunity to have their say.

‘When it comes to voting and asking questions at company AGMs, this shouldn’t just be left to big institutional investors. Retail investors are a force in public markets and it’s important that the world’s most influential companies engage with their views.’

Legacy platforms like AJ Bell, interactive investor and Hargreaves Lansdown already offer this service for their users.

Hargreaves Lansdown does not currently allow voting on US holdings, though. 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.

Freetrade, like eToro which launched its proxy voting service last October, will offer its users access to proxy voting for stocks listed on US exchanges.

A survey conducted by Lumi, a company which facilitates shareholder meetings, last year found nearly half of UK shareholders are blocked from attending AGMs because of the complex share ownership system.

When everyday investors buy shares in companies through a broker, like Hargreaves Lansdown or Interactive Investor, the individual shareholder’s name isn’t directly registered with the company they’re investing in.

Instead the platform gives investors the ability to cast a vote by proxy ahead of the meeting.

The issue is that investors are voting on resolutions for a meeting that hasn’t yet happened.

Just a fifth of shareholders surveyed by Lumi were aware they weren’t registered directly as a shareholder, and the vast majority – 85 per cent – say they would value more information ahead of AGMs to gain a greater understanding in advance of the issues being discussed.

This post first appeared on Dailymail.co.uk