LOS ANGELES—Financial Relations Board, the investor relations subsidiary of Weber Shandwick, has launched of a new retail practice that will support public companies as the reach out to the nation’s retail investment community. Through specialized retail investor relations programs, FRB says it will help companies diversify investor pipelines and determine optimal shareholder compositions that reflect the nherent value of retail holdings.
Individual investors account for vast equity ownership in today’s market. According to The Conference Board, 2ith an estimated 84 million individual investors in the U.S., approximately one-half of all U.S. households own equity representing 27 percent and 41 percent of households’ total assets and financial assets, respectively.
And while the practice of investor relations has traditionally focused on the institutional valuation drivers, retail investors tend to take a longer-term approach to stock ownership and can offer greater stability and loyalty within a company’s shareholder base, according to FRB president Donni Case.
“Today’s investment landscape provides a unique opportunity for companies to expand what is an often overlooked and under-penetrated investor constituency. We are applying more than 40 years of experience to help companies cultivate, retain and communicate with retail and individual investor audiences.
With the relative volatility of institutional holdings and the proliferation of hedge funds in today’s equity markets, Case says the investment landscape is populated with a growing constituency of short-term focused investors chastened by the collapse of the market valuation bubble since 2000. Fund managers hold stocks for less than one year on average.
“Individual investors have begun to move off of the sidelines, aggressively putting capital back into equities,” Case adds. “With the sheer volume of individual investors in the market and the often short-term investment focus of the professional investment community, this is an opportune time to target individual shareholders and generate retail investor pipelines.”
Individual investors also frequently favor companies with recognizable products or brands and tend to demonstrate loyalty to the products or services of the companies they own, so retail outreach is
particularly valuable for mid- to large-cap consumer-oriented companies with strong name recognition and branding. FRB has historically been best known for its work with small- and mid-cap companies.