Welcome to the concluding post of our special blog series marking 20 years of Mediant. So far, we’ve explored four digital trends that are driving a paradigm shift in shareholder communications.
The proxy, investment or even financial services industries are not the source of these trends. On the contrary, our sector is merely subject to sweeping and fundamental changes in how people think about and interact in daily life.
That brings us to the fifth and final trend in our list: today’s “always on” culture. In this post, we consider the demands and opportunities it creates for investor communications professionals.
Trend 3: Periodic and Delayed to Continuous and Real-Time
Shareholder communications used to be periodic and delivered on a schedule. Today, investors have consumer-style expectations of ongoing, omni-channel engagement, and assume a responsive dialogue.
What's Happening?
This trend has a longer history than the others that make up this paradigm shift. Continuous, real-time access can be traced back to the introduction of 24/7 services, across myriad businesses from supermarkets to transport, restaurants to television news.
We entered the digital era primed for “always on” convenience. The internet and social media have expanded and amplified our expectations of getting what we want, when we want it. When shopping, banking, entertainment, education, trading and countless other activities are routinely available at all hours, why should shareholder communications be any different?
What Does This Mean for Issuers and Brokers?
For years, our industry has talked about shareholder engagement. Aligning the interests of issuers, brokers, advisors and regulators is challenging. Progress has been slow.
Too slow: retail investors have grown significantly and are now playing a key role in setting the agenda. A new generation is trying to understand the market and their investments. As we’ve previously explored, they are no longer a passive audience but a highly active cohort of users who choose why, when, and how they want to communicate. They are real-time, interactive, and the information that they have access to is free-flowing and unmediated.
Debate about their sophistication as investors is less important than their evident and growing ability to move markets and create new risks for companies. Issuers and brokers that limit shareholder communications to traditional posted materials, or even email, will struggle to engage an audience that gets its information through other channels.
Shareholders Want to Connect
The good news is these investors are curious. We see it in the buzz about meme stocks and SPACs. Or, less helpfully, in the misinformation that propagates on social media. For example, many SPAC investors believed that not voting their proxy was a vote for management. Misapprehension about securities lending led some investors to advocate for direct stock purchase plans or to have their shares held in registered form.
This can be frustrating, but it speaks volumes about how much shareholders want and need to be engaged. Herein lie opportunities to connect and educate, but we need new and better ways to accomplish these goals.
Pushing out documents of legalese and small print doesn’t work for new investors. They don’t understand its relevance or see it as providing value. However, they do appreciate insights and guidance about their rights as a shareholder, the power of their vote, or why disclosure information sent by mutual funds matters.
An Exciting Time for Our Industry
If new investors are unwilling to open the mail or even an email, other digital channels need to be employed. Fortunately, not only do we have many available options, but we also have platforms and tools that make it easier to coordinate and track multiple channels of communication.
It’s an exciting time to be in investor communications. New technology and the paradigm shift we’ve outlined may finally allow us to more fully align the interests of issuers, brokers, advisors and regulators with those of investors.
Right now, we’re all in a learning phase. We can try out APIs that enable in-app notifications or proxy voting by Alexa. Some approaches will work, some won’t, but our efforts to meet each investor where they are will reveal how to maximize shareholder engagement in a digital world.
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