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EQ Launches New Shareholder Voice report, Showing How The Cost Of Living Is Biting For Shareholders

20 October 2022
  • EQ’s annual report on the state-of-play for retail investors has launched
  • Report assesses current confidence, ESG concerns, attitudes towards voting and AGMs, and how Share Schemes could help support employees through a generational cost-of-living crisis
  • Research demonstrates cost-of-living crisis is having a major impact, as 44% of investors look to protect their finances and sell shares in market turmoil

EQ has today launched its annual Shareholder Voice report, providing a frontline view of the current DIY investor landscape. The report, based on the views of 2,000 UK and 1,000 US shareholders, addresses the main headwinds investors are facing, alongside wider issues such as AGM voting and ESG concerns.

Despite the recent industry backlash, the research found that retail shareholders are placing increasing importance on ESG. Almost one in five (19%) of retail investors in the US and UK said “desire to influence a company’s behaviour” was a top three factor in owning shares, up from 13% in 2021. In addition, more investors said they were likely to vote at AGMs on environmental, social and governance (ESG) related issues than they would on those affecting financial performance*.

Thera Prins, CEO, UK Shareholder Services at EQ comments: “Shareholder activism really has evolved over the past few years, and continues apace, with shareholders taking a more vocal approach. The younger, more engaged cohort are keen to engage on the issues - such as governance - that matter to them, and we expect to see this desire to hold Boards to account continue.

“The challenge now is balancing retail and institutional concerns amid changing societal expectations and market turmoil, creating a difficult melting pot of issues firms need to deal with. It will be interesting to see how this develops over the coming months, and how shareholders – and indeed the industry – continue to navigate financial headwinds.”

Specific UK investor findings from the wider report include:

  • 44% of retail investors have sold shares to help them through the cost-of-living crisis
  • A third of investors (34%) have divested from ethical stocks in search of greater returns, with younger investors more likely to take this approach
  • Millennials are the most bullish age group, believing on average they’ll generate 8.10% returns annually over the next 10 years
  • Younger investors aged 18-40 are much more confident that their older peers when it comes to their portfolios. 31% of 18–40-year-olds described themselves as ‘a fully confident and informed shareholder’ – contrasting to 16% of 57–75-year-olds.
  • Older investors were more than twice as likely to define themselves as very unconfident, with 35% of 41–75-year-olds agreeing that ‘I understand very little about my portfolio and I do not feel I am making informed decisions regarding my shares’. Just 17% of 18–40-year-olds selected this option, implying a stark contrast in terms of financial engagement
  • Share Schemes could help ease financial pain: Of those who agreed that employers should offer financial help to their employees to cope with the cost of living (74%), 16% of this sampled wanted share scheme incentives to help them cope, although the majority, 50% want pay rises in line with inflation

Prins concluded: “The cost-of-living crisis is really starting to take hold. Investors are clearly spooked by the headlines about how much this winter will cost, and it’s translating into them pulling money out of investments, amid market turbulence which has seen many funds go down, not up.

“In terms of dealing with the here and now, the data has also highlighted how Share Schemes could help ease employees’ financial pain, while also tackling the urgent problems of slow productivity growth, spiralling inflation, staff retention and corporate performance. The long-term confidence and financial resilience share ownership can foster when coupled with high-quality education from employers could be a gamechanger in light of a hot talent market.

“There are useful highlights which firms can take note of. For businesses which have seen equity withdrawn, the challenge now will be convincing investors to come back. We’ve seen that younger investors think they’ll make strong annual returns, so now’s the time to prove that your stock can help them achieve that. They’re savvy and confident, so there could be great opportunity in the coming months once we get over this initial financial pain point.”

To download a copy of EQ’s Shareholder Voice report please visit the report summary page.


ENDS

*
Which issues would compel you to vote at an AGM or company meeting?

(Percentage of those who chose 5 or 4 on a scale, where 5 = I would be very likely to vote and 1 = I would not vote)

Those that could affect the financial success of the business

52%

Those that could affect the value of my shares

61%

Those with an impact on the environment e.g. climate change, deforestation, air pollution

54%

Those with an impact on people e.g. labour standards, data protection, diversity and inclusion

54%

Those with an impact on business governance e.g. board diversity, bribery and corruption, executive compensation

53%

 

For more information:

MRM

Fiona McAra
07471 350 286
Email: EQ@mrm-london.com

Notes to Editor:

EQ’s Shareholder Voice report is based on research conducted by alan. on behalf of EQ, with fieldwork by iResearch among 2,000 UK shareholders and 1,000 US shareholders. Fieldwork for the report took place between 28 June – 20 July 2022.

About Equiniti (Equiniti Group)

Equiniti (EQ) is a leading international provider of shareholder, pension, remediation, and credit technology. With over 5,700 employees, it supports 37 million people in 120 countries. EQ’s purpose is to care for every customer and simplify every transaction, delivered with less of an impact on the environment.

 

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