Finding ways to reach shareholders with an appropriate message and choosing the medium to do so consumes the resources of many a fund company. Firms need to communicate bad news to shareholders in a gentle manner, trumpet the good news and economize the delivery of mandated disclosure information.

New advances in shareholder servicing technology have given companies new and better ways to engage their investors while social media has provided additional opportunities to inform investors if used within the framework of a compliance strategy.

Russell Simon, vice president of account management, Broadridge Mutual Fund and Retirement Solutions Group, told MME that in the realm of traditional shareholder communications such as prospectus mailings, there are several solutions that fund companies are using to reduce paperwork and increase efficiency.

"We recently introduced intelligent insertion capabilities that allow fund companies to combine multiple shareholder reports into a single envelope or e-mail notification," he said.

New mobile voting technology has increased the amount of shareholders that use their proxy vote. Broadridge offers two services--Notice and Access--that support mobile proxy campaigns.

"Broadridge introduced the ability for shareholders to vote their proxies in the same place a large majority receive them--on their mobile devices. Upon launch, one-third of the shareholders that voted on mobile devices were first-time voters, indicating that technology enabled a new generation of shareholders to exercise their voting rights because both their access to information and their ability to act upon it was improved," Simon said.

With the advent of new technologies, fund companies are expanding the channels through which they communicate with investors.

"Mutual funds need to be prepared to support emerging communication channels. Today fund initiated regulatory and marketing communications are limited to print and e-mail. New communication channels are emerging, which Broadridge supports, such as Digital Postal Mail where customers have a free, cloud-based mailbox linked to their residential street address and can have exact facsimiles of their paper mail electronically delivered via that mailbox. The availability of other channels like social media, various Apps, and e-book readers such as Kindle are causing financial firms to expand the way they engage with their customers," Simon said.

Dan Sondhelm, partner and senior vice president at SunStar Strategic said that the social media channel has increased fund companies' engagement with their shareholders. "Companies are putting more resources toward their social media platforms such as LinkedIn, Twitter and Facebook. With e-mail marketing, for example, it's about pushing out information designed to cause engagement. With social media, it's about setting up programs to engage, whether or not you are pushing out content, because customers are conversing with you and others. So companies have to have teams set up to communicate with investors at all times and decide how to handle negative topics," he stated.

Sondhelm said the content produced by fund companies has also become more sophisticated in response to the increase in delivery channels. "Also, the content pushed out is becoming more impressive. Consider the videos that fund companies are producing showing their investment process or their portfolio managers on the ground visiting company management."

While utilizing technology, companies still strive to build a personal relationship with their shareholders. Michelle Kilchenman, marketing associate at James Investment Research states that her company is focused on providing personal service for its shareholders and keeping them informed about market developments.

"We really work hard to keep our shareholders informed. We put out an annual economic outlook, which is a forecast on what we see happening in the markets in the next year. It's a large presentation that runs about 45 minutes. We also send a copy to shareholders that can not attend as well as posting it on our website."

Kilchenman said that James connects with its shareholders each week via a newsletter. "Every Monday morning at 10:30 EST we e-mail a short stock and bond update to all the shareholders that have signed up to receive it. We do all of our own research at James so this keeps the shareholders up to date on what we are doing in the portfolios. We also include if we are adding to stocks or changing the bond allocation. We've received positive feedback from the shareholders about this weekly market commentary. The list size is over 5,000 people."

Shareholders might even get to speak to the firm's founder Dr. Frank James. "Every weekend we have a team that comes in and analyzes over 100 market risk indicators. Dr. James still comes in every day. If a shareholder calls, he'll talk about the markets and the funds. We never want to grow to be so large that we lose that personal relationship with the shareholders," she said.

Kilchenman adds that James Funds always welcome surprise visits from its shareholders. "If shareholders are in the area, they are always welcome to stop in. Shareholders like that they can come out and meet the team," she adds.

A solid web presence is also part of James' Funds interface with investors. "We've redesigned our website completely and tried to make it as user-friendly for the shareholders as possible. We post our national press on here as well," Kilchenman notes.

For shareholders that may be averse to technology, James offers the traditional phone system. "We also have a lot of shareholders that are older and don't want to use the computer as much. Our shareholder services will walk them through anything they might need. We really put an emphasis on having a strong shareholder services department," she states.

James Funds is also looking into using social media to communicate with investors. "We have looked at using Facebook and Twitter and are in the process of implementing this. We're working with our compliance officer to see when we can roll it out. We've talked about starting a Twitter account to let people know when Barry James--the firm's president and CEO--is going to be on CNBC," she added.


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