Shareholder perks, benefits and discounts

sevenhills

I was just looking to see if there were any perks on the shares that I own. The two shares that were listed, excluded SIPP holdings.

Surely if there is a reason to give perks, it would benefit that company whether the person receiving the benefit had a certificate of SIPP holding?

So do any companies give discounts or benefits to SIPP shareholders?

BT Group PLC

Minimum shares needed: Certificated shareholders only

underground99

It would depend on what the marketing / investor relations team is trying to achieve but traditionally, perks like discounts and voucher books and goody bags were given to individuals investing their own hard-earned into the company and not to trustees and administrators of pension funds to share among the pension fund beneficiaries.

In a SIPP, ok there's only one beneficiary of the pension, but they are a level removed from the asset value because the tax man says it's not even their money until it's drawn down out of the tax wrapper, the assets are not in that person's estate etc; the only way for the company to even identify that the investor has some sort of ultimate beneficial interest in the company is via the pension trustee who is maintaing records for thousands of clients under the sipp structure and holding the shares in custody on a pooled basis through a nominee.  If the company is giving you a discount to use the product they at least want it to be easy to prove that you are an investor.

Where companies extend the perks to people holding via nominee accounts (as long as the nominee gives them a confirmation), some nominees of unwrapped or ISA accounts will facilitate you as beneficial owner getting the perk or attending an AGM etc, by providing the look-through status to the company in support of a request (sometimes for a fee, sometimes for free, sometimes they won't, depends on broker). If you're looking for an example of a company who doesn't demand you're directly on the share register, I had MAB voucher books annually through a nominee broker for an unwrapped account before I decided to just hold the token amount of shares on a certificate myself after changing broker, as the new broker wasn't willing to help. 

But if you're using a SIPP, the nominee is not holding the shares on behalf of you, they're holding it in behalf of a pension trustee who controls the scheme's assets (albeit at your direction), which is a further level removed from you having engagement with the company's investor relations dept. So I don't know whether your pension trustee would help you or not. Would be more likely if they were a 'reassuringly expensive' provider.

I expect some widely-owned companies like BT can't be bothered giving freebies to someone who might just put a token amount of shares into their large pension pot to tuck away just to get free stuff, rather than being an 'engaged' active investor. Just not worth the hassle of administering it, to give you their stuff for less than market rate. If you like the company enough to buy their shares, you would probably buy it anyway, so limited value in them giving a freebie to all and sundry.

sevenhills

underground99 said:

I expect some widely-owned companies like BT can't be bothered giving freebies to someone who might just put a token amount of shares into their large pension pot to tuck away just to get free stuff, rather than being an 'engaged' active investor. Just not worth the hassle of administering it, to give you their stuff for less than market rate. If you like the company enough to buy their shares, you would probably buy it anyway, so limited value in them giving a freebie to all and sundry.

I work for a local authority and many companies gives their workers a discount, students get discounts; quite often companies seem to give discounts and are just happy for your custom. The displayed price is often discounted.

underground99

sevenhills said:

underground99 said:

I expect some widely-owned companies like BT can't be bothered giving freebies to someone who might just put a token amount of shares into their large pension pot to tuck away just to get free stuff, rather than being an 'engaged' active investor. Just not worth the hassle of administering it, to give you their stuff for less than market rate. If you like the company enough to buy their shares, you would probably buy it anyway, so limited value in them giving a freebie to all and sundry.

I work for a local authority and many companies gives their workers a discount, students get discounts; quite often companies seem to give discounts and are just happy for your custom. The displayed price is often discounted.

Well, don't shoot the messanger. Just trying to give you an explanation. Sure, they can give discounts to all and sundry. If they think they will sell more product by lowering the price to some, or to all, they will. BT claim to already have 30 million customers. So, it seems like a hassle to engineer a system of discounts for those customers who do not appear on BT's share register. but have some sort of ultimate beneficial ownership of a pension plan accessible in later life which is run by a middleman and happens to own some BT shares. 

A rationale to offer a discount to shareholders is that the type of person who goes out and personally buys a direct investment in the company may well be a good loyal customer who will keep renewing his contract or staying beyond the minimum term of the contract and might be persuaded to 'support his company' by buying a new handset if the price could be sweetened. So they have something in place for the investors that they can easily see and verify on share register.

But from a practical point of view it is a hassle if you have to verify the link between an end investor and the company by tracing through a nominee/custody arrangement on top of the pension trustee arrangement (which has been deliberately been put in place so that the shares are not even owned by the investor's estate for tax purposes).  I might 'support' BT's share price by buying in through a collective investment scheme, investment trust or the like, but if it is not my name on the share certificate (because the shareholder is the ABCXYZ Investment Fund plc), they are not going to ask me to assemble my evidence of indirect ownership to give me a freebie. Practically speaking, they will usually just make a simple rule about needing to be a direct shareholder, or for some companies, you can be an investor via a simple nominee arrangement that has you as bare beneficiary. 

If you find a good perk on some published perks summary list (like the one you posted), check the terms on the company's website to see if you qualify for the perks and ask your broker if he can help you out.  I don't know of any that say explicitly 'even if you are a SIPP shareholder'. The start point would be ones that don't mind you being a nominee holder and then query it with your broker about whether that includes your personal pension arrangement.  I wouldn't generally buy shares just because of a perk; that's the tail wagging the dog - first and foremost they should be a company that will generate me some growth or dividends.  I do have some MAB as in normal times I can get decent value out of the vouchers; I had sold but bought again last year, and the price rise since the low points of lockdown has been a nice compensation for not being able to go to the pub.

sevenhills

underground99 said:

But from a practical point of view it is a hassle if you have to verify the link between an end investor and the company by tracing through a nominee/custody arrangement on top of the pension trustee arrangement (which has been deliberately been put in place so that the shares are not even owned by the investor's estate for tax purposes).

A few years ago I would have just bought shares with a certificate, but it seems like they are trying to discourage that.

I guess it also means that small shareholders cannot take part in any voting, maybe that was a hindrance for them too.

underground99

sevenhills said:

underground99 said:

But from a practical point of view it is a hassle if you have to verify the link between an end investor and the company by tracing through a nominee/custody arrangement on top of the pension trustee arrangement (which has been deliberately been put in place so that the shares are not even owned by the investor's estate for tax purposes).

A few years ago I would have just bought shares with a certificate, but it seems like they are trying to discourage that.

I guess it also means that small shareholders cannot take part in any voting, maybe that was a hindrance for them too.

Interesting conspiracy theories.

Dematerialising any new shares into electronic form is a requirement on some stock exchanges, though not London as yet. So if you want to hold your shares on a certificate and be registered as the owner of the shares, you can. Generally though, trading certificated holdings is going to be less efficient (and therefore more expensive) than if a broker already holds your shares electronically in their own name as your nominee and can sell or buy them at a touch of a button without you needing to deliver your physical certificates somewhere.  If you choose to run a pension and have the pension trustee buy a share in the company on your behalf, you can't put it on a certificate in your own name because the share belongs to your pension rather than yourself.

Owning a share as nominee does not stop you voting. I am a small shareholder holding nearly all my shares through nominee or ISA / SIPP accounts, and I vote my shares more often and participate in more corporate actions than if I had my own paper certificate and had to do it by receiving paperwork and sending documents through the post. It is much easier to vote when you can do it at the touch of a button and register your preferences electronically  

If I want to attend an AGM in person rather than just vote by proxy I would simply need to email or secure message my broker so they can arrange a letter of representation; my more expensive broker does it for free, my cheaper broker does it for a nominal fee.  In practice, I would rarely want to attend an AGM ; more likely for interesting entities such as VCTs where I hold the shares in my own name (buying them as new subscriptions rather than on the secondary market, for the tax breaks).

ceivegz

sevenhills said:

I was just looking to see if there were any perks on the shares that I own. The two shares that were listed, excluded SIPP holdings.

Surely if there is a reason to give perks, it would benefit that company whether the person receiving the benefit had a certificate of SIPP holding?

So do any companies give discounts or benefits to SIPP shareholders?

BT Group PLC

Minimum shares needed: Certificated shareholders only

I recently had my SIPP with Hargreaves Lansdown and over the years benefitted from shareholder perks from Whitbread, Mitchell’s & Butler and Eurodisney. Generally discount of other shareholder privileges with no actual monetary value.  About a year ago I moved my SIPP to Interactive Investor due to a couple a major service issues with HL and having asked them why I haven’t received my 20% discount booklet for M&B I was told that because I held
the shares in a SIPP I couldn’t receive any benefits because they would be taxable. I haven’t replied yet but I think I will be telling them that I think this is nonsense as something like a booklet of restaurant vouchers would never incur a tax liability (a gift card or something with a quantified monetary or resale value would) but a discount booklet requires to to spend money to gain a small benefit than the amount you’ve spent so could never be considered a taxable benefit (just like staff don’t get taxed on any staff discount they might be entitled to). 

steampowered

Large companies like BT do not tend to give "shareholder perks".

You will generally only get shareholder perks from much smaller, much higher risk companies - the sorts of companies that crowdfund using platforms like Crowdcube or Seedrs.

eskbanker

steampowered said:

Large companies like BT do not tend to give "shareholder perks".

You will generally only get shareholder perks from much smaller, much higher risk companies - the sorts of companies that crowdfund using platforms like Crowdcube or Seedrs.

BT demonstrably do give shareholder perks: https://shop.bt.com/promotions-and-press-releases/products/bt-shareholder/

p00hsticks

steampowered said:

Large companies like BT do not tend to give "shareholder perks".

You will generally only get shareholder perks from much smaller, much higher risk companies - the sorts of companies that crowdfund using platforms like Crowdcube or Seedrs.

There are plenty of large companies who give perks - I get free breakfasts whenever I stay at Premier Inn because I hold Whitbread shares, for example.

ChilliBob

Equity for punks springs to mind, however not traditional shares, and eith the current Brewdog news and revelations I'd not touch them myself!!