A shareholder petition has reignited the backlash against financial services group Hargreaves Lansdown (HL.) for charging retail investors to vote at meetings. Changes introduced in January mean if you want to vote your shares held in a Hargreaves Lansdown account you must pay £10 plus VAT a time. You face the same fee if you attend the meeting yourself to vote.

Share Action has set up a petition for Hargreaves clients to sign, should they object to the pricing. It cites the reasons for supporting the campaign as follows:

'A) Hargreaves Lansdown is the largest execution only broker in the country and could influence other providers and therefore all UK shareholders

B) It may well deter shareholders casting votes in their Company of which they have a beneficial interest

C) Not casting AGM votes as a result of the charge could lead to resolutions being passed that otherwise wouldn't be and that might also, not be in the interest of shareholders'

We were contacted on the AGM pricing debate earlier this year by Shares reader Michael Jones who is also a company secretary at a Main Market quoted company. He says: ?I am a great believer in giving retail shareholders the right to vote and to make it as easy as possible for them to do so. If you want to vote at six AGMs the cost to you will be £60 plus VAT, a total of £72. This makes it prohibitively expensive to act as a responsible shareholder.?

We have previously discussed the threat to shareholder democracy posed by nominee accounts. Only ?members? of the company listed on the share register are ensured of the right to attend general meetings and vote on resolutions and only those who hold their shares in paper certificate form or through Crest personal membership will be listed on the register; Crest being the depository for the UK?s electronic share holdings.

If you instead hold shares in the nominee account of a stockbroker then you are not on the share register (the broker is instead) and nor are you a member, you are simply a beneficial owner of the shares. As such your presence at general meetings is not assured and you will not necessarily be able to vote.

At present Individual Savings Accounts (Isas) and Self-Invested Personal Pensions (Sipps) have to be held within nominees. Jones picks up on this theme. ?A number of retail shareholders also want to hold their savings and investments in the most tax efficient manner, retail shareholders in nominees have always been able to vote free of charge. Now to be charged to vote at each AGM is too much.?

Shareholder representative body ShareSoc has also criticised the charge. Chairman Roger Lawson says: ?Instead of making it easier for investors to exercise their rights, as other investment platforms have done by providing automated systems, they seem to have chosen to deter investors from taking any interest in the companies they own.?

We put these concerns to Hargreaves Lansdown in April. Head of financial planning Danny Cox replied: ?The charge for corporate actions, including voting, is set to reflect proportionately and fairly the work required, and to only charge those clients who use these services.?

Essentially the argument being that previously all its customers subsidised the minority which wanted to vote at or attend company meetings. Against this we would argue there is a significant cost for all investors if shareholders are not encouraged to be fully engaged in the way their companies are run.

In February Hargreaves backtracked in response to negative feedback and the threat of competition from rival providers over plans to increase charges that would hit clients who wanted to put their money in investment trusts rather than unit trusts or other open-ended funds.

This is an updated version of an article that was first published in Shares on 1 May 2014. By Tom Sieber and Daniel Coatsworth.

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Issue Date: 03 Jun 2014