The retail investor | the free library

This is verbatim:

IR Firm Pushes Retail investor…-a0112360402

Has the recent runup in the stock market brought the individual investor, battered by years of losses, back into the market in a big way? Experts may be divided, but one sign that it has comes from the Financial Relations Board (FRB), a major public relations and investor relations firm.

The Chicago-based firm has launched a program designed to help companies woo retail investors, arguing that they tend to take a longer-term approach to ownership, providing greater stability and loyalty within the shareholder base.

The program attempts to capitalize on a clear trend in recent years: the proliferation of hedge funds–which now outnumber mutual funds in the U.S.–and their focus on short-term, often intraday, trading. In sharp contrast, individual holders frequently keep shares for three to seven years and often hold on to downtrodden stocks in the hopes that they will eventually see their paper losses disappear.

Moira Conlon, executive vice president and general manager of FRB, said in an interview that the firm has been marketing the program mostly to existing clients, especially those with strong consumer brands.

In some cases, Conlon says, companies can benefit from having a “fact sheet” and showing up at brokerage events to build outreach. “You need to find brokers who are position builders,” she adds. In addition, she says some FRB clients will mail the fact sheet to shareholders with a reply card, with the aim of getting a reply with the identity of their broker or money manager.

“Anyone who’s not marketing to retail needs to look at the landscape and realize they are missing an opportunity,” she says. “Whatever the size of the program, there’s an upside to be had in terms of stabilizing the [shareholder] base and reducing volatility. Other benefits include branding with investors.”

Conlon adds that “IR budgets haven’t grown” in the recent down years, but that “companies that are serious need to empower IR to get the job done.”

About Derek

My key interests are online investor relations, websites, social media, enterprise 2.0 and intranets, and XBRL. Speak to me if you need a solution in any of these disciplines, or follow my knowledge links on this site and others. Find me on Twitter, LinkedIn or in recent conversations.