Derek Pain: Forcing the electronic option is a dereliction of a company's duty

Traditional investors are under pressure to bow before this electronic age. I have complained before about the devious ways that are adopted to prompt shareholders to give up their entitlement to receive hard copy communications and dividend cheques. Thankfully, the campaign waged so beguilingly a few years ago to abolish paper share certificates seems to have died the death. I expect it will be resurrected before too long.

To save money, quoted companies and the City would like all shareholders to rely on their computers for information, including annual reports which were once regarded as powerful publicity mediums. There are also continuing moves to encourage electronically transmitted dividend payments direct to a shareholders' banks instead of posted dividend cheques. Whereas it is possible to charge investors more if they request certificated deals when buying shares it is not quite so easy to extract cash from those who want printed reports and dividends through the post.

Many quoted companies and their City cohorts rely on subtle methods to obtain compliance. For example, most shareholders who want to retain printed reports have to make contact with the company or its registrar. Surely, it should be those who wish to change the system and go on-line who should make such an effort? After all, why should "no change" require a declaration while those opting for the electronic switch sit back and take no action? It seems a devious attempt to capitalise on the inertia of mainly small investors. Such methods represent a dereliction of a company's duty to its shareholders.

Dividend cheques, which allow the recipient a choice of accounts, also get the hard-line treatment. An example is provided by Lighthouse, the accountancy group that is a constituent of the No Pain, No Gain portfolio. Company secretary Mark Ross, in a letter accompanying the printed interim report, says dividends will be paid directly to shareholders' banks if the registrar holds the necessary authority. He adds: "Should that authority not yet be in place, then the documentation enclosed with the warrant and tax voucher will set out the requirements to be followed in this regard". No mention that cheques are still part of the system. Admittedly, they are under some threat of extinction because usage is declining. But in the numbers game, the indisputable fact that, often, one cheque represents half-a-dozen transactions is conveniently ignored. The VAT authority's strange decision not to accept cheques but only on-line payments is another example of the intolerable pressure now being inflicted on traditionalists.

It is, of course, small and in some instances less sophisticated investors who suffer in the face of this electronic blitz. Major shareholders and professional investors are able to take care of themselves and, I imagine, already conduct many operations on line and in the case of private investors endure the indignities of nominee accounts.

I suppose age is a factor. It is we old'uns who dislike change. I, one of those to get George Osborne's blessing to continue to receive a free TV licence, do not wish to accept on-line dominance. The internet seems fraught with danger which is underlined by the weekly news diet of villainous on-line shenanigans. It is not my desire to dissuade any investor from embracing the internet and all that goes with it. But I feel those who do not want to should be allowed, perhaps even encouraged, to carry on the old-fashioned way. Such a Luddite approach is not popular in the City.

The portfolio is a buy-and-hold investor. It favours hard copy and dividend cheques. That is not to say it ignores the internet. I frequently log on to the excellent ADVFN service and the Plus market as well as other facilities. But I have no desire to trade shares or bank on-line.

There is evidence that many don't want to embrace computers. Who knows? Perhaps the Vince Cable initiative for a corporate rethink will address the problems of harassed investors. I doubt it.

The portfolio has dumped Nighthawk Energy at 14p. The selling tide is too strong to resist. More next week. Another constituent Private & Commercial Finance indicated half-year profits would be in line with expectations.

yourmoney@independent.co.uk