Advice: targeting retail investors
30 April 2012
Widen your focus beyond institutional shareholders, advises Henri Perron
Q: Why is it important to devote resources to the retail investment community?
A: During 18 years in IR, I have found that one of the top concerns of the thousands of high-level executives I meet is to get their corporate message across and increase the visibility of their company. In doing so, many focus on institutions, while largely ignoring the retail financial community.
Yet the retail side is the single most effective way to target and increase your shareholder base, improve liquidity, increase the understanding of your company, maximize its reach and strike the right relationships.
All of these are needed to gain confidence from the marketplace and enhance visibility, and they usually lead to a significant impact on valuation, too.
The retail market is far from dead. In fact, after a few shaky years, it is looking for great stories more than ever. The reality is that some retail financial advisers are managing an asset base larger than those of certain institutions.
While the institutions may be more involved in financing and block trades, the retail professionals are driving liquidity and the retail shareholder base is an essential part of any IR strategy.
By going to the retail community you are dealing directly with an audience that will pitch your company to hundreds, if not thousands, of potential stakeholders.
Based on their risk profile, these professionals can specifically match your story to their clients most likely to follow and invest in your firm. Think highly targeted, highly effective investor relations.
There is a reason why some institutions look at which companies are on the road: consistently holding roadshows and giving retail investment advisers a forum for questions and discussions is also an excellent way to increase confidence in your company and maximize management’s exposure.
The message will not get diluted along the media chain; it will reach your audience directly, letting you prove that management is credible and transparent.
Addressing the retail community will also give you access to direct feedback on your story. Instant feedback gives you an opportunity to respond and address any concerns almost instantly.
If done internally, addressing the retail market may end up being difficult, expensive and time-consuming. Using a firm with the right expertise can help reduce the costs and effort significantly.
Hiring a retail-specific IR company with a long-standing reputation will allow you to use its expertise, leverage its relationships and manage the entire process with an army of professionals, allowing you time to focus on daily operations and achieve your company’s milestones.
Engaging hundreds of targeted potential investors will take only an hour of your time – the hour you will be on stage.
Henri Perron is president of Renmark Financial Communications.
Original source: IR magazine