General News

Financial repression to continue

Are you feeling subject to financial repression? You should be because it's the phrase used to describe how the Government reduces it's debts by lowering interest rates to a level that is negative in real terms. Anyone saving in a bank account or building society is having their savings eroded this way because they are not getting a real return. Bank base rate has been at the historically exceptional rate of 0.5% for some time and high street banks are as ...

Hargreaves Lansdown backs down

On the 17th January ShareSoc issued a press release which pointed out that the new charges announced by Hargreaves Lansdown would mean that some investors might face a doubling of costs. See the text of the press release here: Hargreaves Lansdown Double Charges Investors. The particular problem was that anyone holding a mixture of investment trusts, funds and direct shares in a SIPP would now have two separate "caps" on overall charges. ShareSoc was no doubt not the only body that raised ...

Nominee system defeats shareholder voting

ShareSoc  has recently issued a survey to our Members and the public covering their voting and attendance at General Meetings and the prevalence of the use of nominee accounts. The results demonstrate that the nominee account system undermines shareholders' ability to vote at the General Meetings of the companies they own.Nominee accounts are now the commonest form in which investors hold shares in companies (89% of ShareSoc Members held some shares in a nominee account, as opposed to the use of ...

Eurofinuse adopts manifesto

Eurofinuse, a representative body for European shareholder organisations of which ShareSoc is a Member, has adopted a "Better Finance Manifesto". They are launching this before the European Parliament elections in May to try and influence politicians to adopt policies to protect savers and investors over the coming years.Although some of the manifesto policies are focussed on problems in other countries in Europe than the UK, there are many meritorious aspects. Here's just a few of the issues they cover:1. That there ...

AIM is no longer a dog, but the mastiffs are the winners

There was an interesting analysis of the performance of AIM stocks in a recent "AIM Journal", a publication sponsored by Finncap.  As others have pointed out, AIM finally changed course after a long streak of poor performance, and the AIM index actually beat both the FTSE-100 and FTSE-250 indices in 2013.If you had invested in the AIM index back when it was formed back in 1996, even with dividends reinvested  you would still be losing money. And that is the case ...

Hargreaves Lansdown doubles charges for some investors

On the 15th January Hargreaves Lansdown (HL) announced new charges on its investment platform, which is one of the most widely used by private investors. The changes are no doubt provoked by the new rules whereby funds can no longer pass part of their charges back to HL, as a result of the RDR (Retail Distribution Review). But the changes will mean that the annual fees paid to HL by some investors will double. ShareSoc has issued a press release explaining ...

Inflation down the Government says. No it’s up.

The Office of National Statistics have reported that inflation fell to 2% in December 2013. That's the Government's target for inflation even though it has not met it for some years. Mr Cameron said it was "welcome news".Before we all rejoice, unfortunately that is based on only one measure of inflation - the Consumer Price Index (CPI). On the more widely used Retail Price Index (RPI) inflation was actually up from 2.6% to 2.7%. In reality the RPI is probably more ...

Investment Trust Discounts at Record Low

The AIC issued a press release today saying the average investment company discount was now 3.4% - a record low since the figures were first recorded in 1970. The AIC (Association of Investment Companies) represents investment companies such as investment trusts so you can see why they would want to fanfare this figure. Investors in such trusts generally welcome a narrowing of discounts (net asset value versus share price) although it no longer means they can buy the underlying assets on ...

Simplifying your life – expensively

In the New Year edition of the Hargreaves Lansdown newsletter, founder Peter Hargreaves leads off with this comment: "I am in a quandary. I can't work out whether life just becomes more complicated the older you get, or whether successive legislation and regulation that has happened in abundance during the last 15 years is increasingly making life intolerable. I rather suspect both are root causes of life's complications". I have had similar concerns of late. Having gone through some major technological upgrades ...

VCTs – Stopping the tax relief abuses

The Government has published its response to the public consultation on share buy-backs in Venture Capital Trusts (VCTs). In particular the proposals put forward were aimed at stopping "Enhanced Share Buy-Backs" where VCTs were buying back shares from investors and immediately reinvesting the cash paid to investors in a new shares issued to the same investors, thus enabling them to obtain tax relief on the same original cash more than once.There was a general acknowledgement in the responses to the consultation ...

The Chancellor’s Autumn Statement – What’s in it for investors?

You may well be worse off if you are dead. The Government is to clamp down on the payment of state pensions to people who are dead, which is apparently a particular problem when they move overseas upon retirement.Otherwise these are come of the changes and how they may affect individual investors:- As expected, there is to be a restriction on Venture Capital Trust (VCT) "enhanced share buy-backs" upon which there was a recent consultation. In future VCT investments that are ...

FCA Consultation on Crowdfunding

The Financial Conduct Authority (FCA) is consulting on a new regulatory approach to cover "crowdfunding".  Crowdfunding is in essence a direct approach to investors for either equity investments in early stage companies, or loans to similar companies. It has become popular of late due to the emergence of various web-based platforms to collate the interests of many small investors, but can also be employed by companies to make direct approaches to investors. ShareSoc looked at one of the latter examples (Clear ...