eToro the multi-asset CFD broker has introduced a new service for equity traders and investors that will allow them to have their say in the companies they own and offer proxy voting on all of the stocks it offers to clients.
eToro had previously offered the service on US stocks but has now extended it to cover shares from across the world.
This means that equity investors, including fractional shareholders, who trade through Etoro, will now be able to vote at company AGMs, and have their say on key matters such as directors’ remuneration, dividend policy, M&A and ESG issues.
In recent years retail shareholders, whose stock holdings are dematerialised and held in a nominee account, have found it tough to make their voices heard. Simply because their broker didn’t offer a proxy voting service.
eToro is leveraging its relationship with technology specialist Broadridge Financial Solutions to facilitate proxy voting for its equity trading clients.
Plenty of demand for voting among shareholders
There certainly seems to be a demand for the service, with more than 145,000 votes cast by eToro’s US stockholding clients in 2023.
Whilst the broker’s Retail Investor Beat survey suggests that almost 1 in 3 of their clients have previously voted at an AGM.
With the re-election of directors, dividend and share buyback policy, and executive pay being the issues that matter most to clients.
eToro’s UK Managing Director, Dan Moczulski, said of the new voting service:
“eToro users embraced proxy voting last year and we are thrilled to be building out this feature to include all stocks on our platform. Our users invest in companies from all over the world. Now they can have their voice heard with these companies by having a say in big corporate decisions”
He added:
“Whilst institutional shareholders have long been able to influence boards, executives and the direction of businesses, retail investors have not always been given the voice that they deserve. However, with the explosion in retailing investing that we’ve seen in recent years, this is changing”
Shareholder rights
It is only correct that retail clients should have the opportunity to voice their opinions on key corporate governance matters.
A share of the profits and a vote are two of the intrinsic benefits of equity ownership.
For too long administrative issues, and a lack of urgency, among brokers and custodians, have prevented retail traders from exercising their voting rights.
And one wonders if, in future, not offering the voting facility might be seen as contravening the FCA’s Consumer Duty regulations.
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