If you’ve bought stocks and shares, you may not be aware that some investments actually come with certain shareholder perks. But what are these perks and are they worth it to investors?
Let’s take a look at what rewards shareholders can access, who has the best perks, and whether these bonuses make an investment more attractive.
Keep reading for a full breakdown or click a link below to go straight to a section…
What are shareholder perks?
This is a bonus benefit you can access if you own shares in a company.
It’s separate to any dividend income your shares might pay and it’s more of a benefit that’s often related to the business itself.
The basic idea is that it makes shareholders feel more involved and more loyal as investors.
Most of the time we can act like mercenaries when it comes to investing, simply hunting for ways to make money.
Shareholder perks offer an alternative way for firms to attract investors. One that encourages you to interact with the company.
How do you find stocks with shareholder perks?
Sometimes these extra benefits aren’t widely publicised. This is for a few different reasons:
- Most investors buy shares using a broker instead of direct with the company.
- The idea of a long-term ‘buy and hold’ strategy has gone out of fashion with some investors.
- It can be difficult for companies to facilitate these perks if too many people get involved.
So, to find stocks that offer shareholder perks, you’ll often have to check directly with the company. Or, on the ‘investor information’ sections on the website.
What shares offer shareholder perks?
These can change frequently depending on the company. But to give you an idea, here are some examples of UK shares that offer shareholder perks:
- Big Yellow Group (BYG) – 10% off self-storage and other services if you own a share.
- Bloomsbury Publishing (BMY) – if you own at least one share, you can get 35% off books.
- BT Group (BT.A) – shareholders can get discounts on loads of different electronics.
- Carnival (CCL) – for owners of at least 100 shares, you can get on-board credit to use on a cruise.
- Legal & General Group (LGEN) – access to a range of discounts and services, including cheaper life insurance policies if you own a share.
- Mitchells & Butlers (MAB) – shareholders can get a voucher book giving 20% discount off bills in pubs and restaurants.
- Next (NXT) – 25% discount on one item each year if you own 100 shares.
- Whitbread (WTB) – shareholders with at least 64 shares get a benefits card that gives discounts and free breakfasts at Premier Inn, and 10% off bills at major restaurant chains.
Should you buy shares just for the shareholder perks?
Getting a discount or a perk isn’t necessarily a reason to invest in a company. However, lots of firms offer these benefits even if you own a single share.
Some of these individual UK shares are quite cheap.
For example, it costs roughly £2.50 for a share in L&G at current prices. So, buying a share and then getting 10% off a life insurance policy could make it worthwhile.
But, for perks that you can only access when owning a decent number of shares, it’s probably not worth it. Unless you wanted to invest in the company anyway.
How often do the perks change?
It will depend on the shares. Some companies have been running perks for years. But, in tough times, it’s these sorts of added costs that firms are quick to cut.
Since the coronavirus pandemic, a number of companies have paused or stopped shareholder perks altogether.
So, it is something you might have to check on a regular basis. Also, it’s worth double-checking the deal is still running before you proceed with a purchase.
How do you access the shareholder perks?
The process will be different for each company. Some brokerage accounts will direct you on how to access these perks if you hold shares.
However, with some brokers, you can’t qualify or access these perks if your shares are held on their platform.
It really needs to be looked at on a case-by-case basis, because it depends on the shares and your broker.
But, if you’ve got time on your hands, you can always pop a quick email to the investor relations department of a company.
Or, give them a call to ask if there are any current shareholder perks, and instructions for accessing the benefits.
What other benefits can shareholders get?
Most companies will invite shareholders to the annual AGM and also offer voting rights.
These aren’t necessarily exciting perks, but it does give you more of an opportunity to be involved with the company.
This can be great if it’s a firm you are invested in and you want to give your input on how things are being run.
Most small investors don’t exercise their voting rights, which is a shame. You have to remember that by owning shares, you’re a part-owner in that company.
So it’s worth having your voice heard, especially if you have some feedback you’d like to share. This is one reason why it can be a good idea to buy shares in companies that you’re angry with! It gives you the opportunity to attend shareholder meetings and shout at the board!
Another advantage of attending shareholder events is that you get the chance to mingle with like-minded investors.
You might even grow your network or meet a fellow investor to strike up a friendship with.
The bottom line on shareholder perks
Additional shareholder benefits can be worthwhile. Especially if the barrier to entry is low or it’s a company you wanted to buy shares in anyway.
Yet, bonus discounts and offers shouldn’t be your sole reason for investing in a company.
If the share price falls significantly, you’ll likely lose a lot more than you stand to gain with a voucher booklet.
This is definitely an underreported area of investing. And, with the current cost-of-living crisis, it’s worth saving money however and wherever you can.
If you want to stay up to date with what’s going on in the world of investments, make sure you sign up to the MoneyMagpie fortnightly investing newsletter.
This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.
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