Britain's shareholding employees confess

Article date: 25 February 2002

More UK employees are investing in the companies they areworking for - but most are only in it for the money, according to anew study from norwichunion.com.

Calls during the 1980s for more workers to buy shares in thebusinesses that employed them were aimed at making them feel theyhad a stake in the company

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But the survey by norwichunion.com - Norwich Union's onlinepersonal finance service - found that most had bought shares purelyfor financial gain.

Nearly a quarter of the adult working population owns shares inthe company they worked for, but nearly two thirds of them feltthat their investment didn't actually give them any sense ofcompany ownership.

Fewer than one in ten of the shareholders said they had acquiredcompany shares because they wanted to play a role in theircompany’s future. Only 15 per cent actually believed thattheir shares represented a good investment.

Rob Davies, brand manager, norwichunion.com, said: "The ideathat staff who own shares in their company will somehow feel moreinvolved in its success doesn’t appear to ring true in themajority of cases."

"Our research shows that the overwhelming reason for owningcompany shares is as a means of making money (23 per cent) withvery few employees seeing share ownership as being linked to theirindividual performance or that of their colleagues.

“We also know that most people who own shares simply keepthem for a rainy day and don't actively trade. That said, theinternet has seen increasing numbers of online traders, in thiscountry, though the UK still lags behind other European countrieslike Germany where online trading is three times higher than inBritain.

"However, the internet provides the new wave of UK investorswith a great opportunity to close the gap on our Euro- neighbours,as they are likely to want to take a more active role in managingtheir share portfolios."

Most people are put off trading shares by the perceivedcomplexity of dealing and remain happy to just sit on the sharesthey’ve got, potentially missing out on some of the bargainsthe stock market is currently offering.

Simply doing nothing at a time when a number of commentators aresuggesting that now is the time to invest for medium or long termgain may be costing investors millions.

norwichunion.com has launched an online share dealing servicedesigned to help people buy and sell shares easily andconveniently. With a trade costing as little as £5*, and helpfuland jargon-free tools to guide you - including a virtualportfolio** that allows possible investments to be tracked withoutspending a penny - the service aims to change people’sperceptions that share trading is only for experienced investors bymaking it straightforward and accessible.

norwichunion.com's online share dealing service can only foundat www.norwichunion.com.

-ends-

Press contact:
David Ross at Norwich Union on 08703 66 68 65

Notes to editors

  • **Please remember that past performance is no guide to futureperformance. These are risk investments and their value, and anyincome from them can go down as well as up.
  • This survey was carried out by Taylor Nelson Sofres between18-20 January 2002. 1,003 people, aged 16+, were interviewed onthe telephone across the UK.
  • norwichunion.com was launched in May 2001 and provides acomprehensive range of free, interactive financial planning toolsand impartial money guides, designed to help people make betterfinancial decisions by making complex money matters simple.
  • A fund supermarket ISA, offered by NUSOF.com Limited, andshare dealing service are the first in a range of products thatwill subsequently include a number of banking products.
  • Norwich Union is the UK’s largest insurer offering acomprehensive range of long-term savings and general insuranceproducts.
  • Norwich Union’s news releases are available on thisinternet site
  • A selection of images is available from the Norwich UnionNewscast site at www.newscast.co.uk
  • An ISDN facility is available for studio quality interviews.Call the press office on 08703 66 68 68

For life and pension media enquiries 08703 66 68 73 For allother media enquiries 08703 66 68 68

*The £5 per deal plus stamp duty and PTM levy, if applicable, isa special offer which commenced on 7 January 2002 and will finishon 31 March 2002. The operation of this special offer is entirelywithin our discretion, further we reserve the right to withdraw thespecial offer at anytime. An additional £5 will be charged fortrading over the phone and from 1 April 2002 our standard pricingfor share dealing will apply. Please note that there are additionalquarterly management charges of £9.95 once you have set up youraccount online. Please read the full terms and conditions on thenorwichunion.com web site for important details.

The norwichunion.com online share dealing service is provided byPershing Securities Limited (Pershing) who are regulated by theFinancial Services Authority and are members of the London StockExchange and LIFFE and are members of the London Stock Exchange andLIFFE. By using the service, customers will form a contract withPershing and all share trades effected by customers will be withPershing. To market the service, Norwich Union Wealth ManagementLimited is regulated by the Financial Services Authority forinvestment business.

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