ShareSoc has issued the following Press Release:
Following the takeover of Stocktrade by Alliance Trust Savings (ATS), the latter have decided to withdraw support for Personal Crest Membership from their clients. Clients will either have to transfer into the ATS nominee service, turn their holdings into paper share certificates (a truly archaic form nowadays which are soon to be outlawed by an EU Directive), move to another broker or liquidate their holdings. This continues a recent trend for stockbrokers to terminate the provision of a Personal Crest Membership service or to block the opening of new accounts.
ShareSoc deplores this trend as Personal Crest Membership has many advantages for retail stock market investors. Personal Crest Members are on the share register of companies and hence enjoy a direct relationship with the share issuers. They get ALL the rights automatically to receive information, to vote and attend at General Meetings and several other rights. They do not need to rely on their broker (i.e. the nominee operator), to pass on the rights, which many brokers do not do.
In addition they receive all dividends directly rather than the broker using them as a float to support their business. And they do not suffer the legal risks of nominee accounts if their broker gets into financial difficulties, as many do.
The provision of indirect voting and representation by brokers (as Alliance Trust offer for example), is not a good alternative and generally does not work reliably and for all possible share holdings.
Stockbrokers promote nominee accounts and prefer not to offer Personal Crest Accounts simply because it helps them to lock in their clients. This is simple anti-competitive behaviour by stockbrokers which ShareSoc suggests should be reformed.
ShareSoc has been running a campaign on the issue of shareholder rights (see www.sharesoc.org/campaigns/shareholder-rights-campaign/ ) for some months, but we are disappointed that progress by the Government on tackling the whole area of the low cost provision of an electronic “name on register” system as recommended by the Kay Review and as proposed by the ICSA Registrars Group to meet the dematerialisation EU mandated requirement, is progressing very slowly. In the meantime Personal Crest Membership is an invaluable capability that all retail investors should be using.
We recommend that existing Stocktrade clients who use Personal Crest accounts should transfer their account to another broker who does support such accounts (the Personal Crest system actually makes such transfers very easy to accomplish which is another good reason to use it).
ShareSoc is researching which brokers support Personal Crest accounts and any investors interested in this kind of service should contact them. Likewise any brokers who offer this service and wish ShareSoc to promote it should contact us.