Corporate Eye

Investor Relations and Main Street

In America, the populist press often likes to refer to Wall Street and Main Street.  Wall Street, of course, referring to all those suit wearing Ivy League graduates who prowl the arcane corridors of finance and insulate themselves from the rest of the world with high walls around their mansions, and Main Street being hard working “normal” people who can’t get a break from Wall Street.  While I doubt most IR professionals would subscribe to that view, it does raise the question, can an IR site be helpful to regular investors?

Investor Relations and Molly Mainstreet

Recently, we discussed how to make IR sites more user friendly for employee shareholders, but how does one go about making an IR site more user friendly for the average person?  The number of people who own stock is higher than it has ever been and it is growing.  So, how can an Investor Relations website target those common “Main Street” folk who are becoming a larger group of shareholders each day?

For Dummies versus Dumbing It Down

For many, the first instinct is to “dumb it down.”  This is a recipe for trouble.  By trying to give an investor just the gist of the information, you risk eliminating pertinent specifics and creating legal and ethical issues.  However, much of the space on an average IR website is taken up by what could be considered technical material.  While a prospectus or annual report is indeed designed precisely to provide information to the public, it can seem overwhelming to investors without a degree in finance.  The beloved, retired, widowed, orphaned, school teacher, is unlikely to find much use out of thick, statistics filled financial statements.  So, how do we reach this audience?

The popular “For Dummies” book series has achieved success by taking one concept and sticking to it religiously, provide the necessary information, but do so in a manner that is friendly, accessible, and straightforward, with minimal use of jargon.  This same concept is the secret to success with the regular investor.  However, the time required to rewrite financially technical materials can be significant, not to mention the need to re-approve everything.  It would be great if there was a source of such material already available.

News, Lots of News

There is one area where some information has already been reduced to a digestible level.  When a company issues a press release, the information cannot be long and unwieldy.  The average reporter would not bother with it, and the affect of the release would be squandered.  So, press releases are, by design, developed as understandable information in an accessible size.  In addition, press releases are also already vetted by the legal and compliance departments before their release, so there is no worry about the information being improper in some way.  In other words, they are the perfect information pieces for our Main Street investor.  Make such news articles and press releases and integrated part of your IR site without pushing them off to the corner where they look like something no one really wants to see and the accessibility issue is already much improved.

Just Talk to Us

The other major focus for dealing with Main Street investors is accessibility.  The image of large companies standing in their towers behind guarded lobbies is a powerful one.  An Investor Relations site can reinforce this image by having contact information buried under various link levels, or silently placed elsewhere on the web site.  To provide the maximum benefit for the common investor, contact information specific to investor relations should be prominently displayed on the IR pages.  This information should include both email addresses (a general catch-all email account is fine) as well as a regular mailing address and if possible a phone number.

Also helpful is the method for ordering standard printed versions of investor related material.  Since many investors may be working from knowledge gained in the world of mutual funds, a similar concept to the prospectus can be a comforting idea to someone branching out into direct stock ownership.  The three lines of text on an IR site stating how and where to order such materials will be of much use to these investors.

Remember, many people are still more comfortable with a phone call than an email, and the number of people who feel better if they have something “in writing” is still significant.  You can reach out to both groups with a nice contact list.

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Brian is a small business owner, consultant and freelance writer. Brian began his professional career in the computer industry as a consultant where he became keenly aware of the internal workings of companies from Fortune 100 giants to small two-man shops. While working with a mutual fund company, Brian developed a strong interest in finance and became a Certified Financial Planner. As a financial professional, Brian specialized in working with small business owners. Brian is the co-founder of ArcticLlama, LLC a premier business writing and consulting firm. He also runs a real world personal finance blog. Brian lives in Denver with his wife and daughter.
 
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