Among the boom in new retail investors, millennials are the group most likely to vote their proxy in the 2021 season, according to a new survey from Broadridge Financial. Almost half (46 percent) of retail investors aged 25-40 say they plan to vote their proxy in 2021, a figure researchers say is the highest for any generation.
Overall, 39 percent of investors with two years’ investing experience or less say they will definitely vote their proxy, with many (42 percent) saying they want to have a voice on issues that are important to them, and a significant number (38 percent) saying they feel it’s their responsibility to vote their proxy.
‘The recent rise of the individual investor has been driven by technology, mobile and zero-fee commissions,’ says Martin Koopman, president of bank broker-dealer and investor communication solutions at Broadridge, in a statement. ‘The survey data shows that newer and younger investors want their investments aligned with their values – especially when it comes to ESG-related issues. We are also seeing these new investors look to their advisers, brokers and fund managers for technology solutions that make it easier for them to vote their proxies with their values.’
Broadridge finds that certain groups of investors would be more willing to vote their proxy if they could do so through a mobile app, including 88 percent of Gen Z investors (aged 18-24), 92 percent of millennial investors and 89 percent of investors with two years’ investing experience or less.
A focus on ESG and diversity
Retail investors are particularly interested in voicing their opinions on certain issues, finds Broadridge, with social issues – such as diversity – and environmental issues around how companies are managing climate change the two areas retail investors most want to express their opinion on through proxy voting.
Surveying around 1,000 retail investors – following a year when more than 10 mn new brokerage accounts were opened, according to JMP Securities – Broadridge finds that 67 percent believe the companies they invest in should take active steps to address environmental concerns, such as climate change, and 62 percent believe those companies should address social challenges, such as those around diversity and inclusion.
When it comes to voicing their opinion through proxy voting, respondents name social issues, such as diversity on the company board (43 percent) and environmental issues (41 percent), as most important. These are followed by approving or rejecting M&A (40 percent), executive/CEO compensation (35 percent), general corporate governance (33 percent) and appointing the board of directors (32 percent).
The report also looks at how newer investors educate themselves. Noting that respondents with two years’ investing experience or less are the most active traders, researchers find that their investment decisions largely stem from information they receive from reading or watching the news (35 percent), friends (34 percent), family (31 percent) and social media (30 percent).