While many public corporations are focused on engaging the threat of activist shareholders, asset managers still wrestle with reaching the larger percentage of fund shareholders who may pay scant attention to the prospectuses, proxies and reports that cost firms thousands of dollars to produce.

Financial marketing experts say there are new solutions available through technology than can assist in improving shareholder communication, but suggest firms first have to drop the formulaic, print-heavy approach to disseminating fund information to make an impact.

"Many firms still communicate quarterly, the old fashioned way, and these shareholder communications are basically templates and they just plug in information," says Dan Sondhelm, partner and senior vice president of SunStar Strategic, a marketing firm for the financial services and renewable energy sectors.

"They're really boring to read. and they're not communicating on a regular basis, in a way that adds color to how they're making money and how they're making their decisions.

"They're just doing it the same way they've been doing it for 20 years and now the industry has evolved where investors expect much more communication."


Of course, some firms would argue that no matter what they do, many shareholders don't pay close attention to fund notices, says John Michel, CEO of CircleBlack. an online account aggregator and wealth management platform.

"Getting shareholder attention is the first and biggest challenge," Michel says. "Most shareholders aren't that interested and don't feel that their vote really matters. The typical response is that management will just do what management wants. The evidence is clear - generally, if the board makes a recommendation, then those recommendations pass with no discussion unless there is a large institutional investor who is challenging management in a proxy fight."

With that in mind, Sondhelm says firms need to think about their shareholder outreach strategy.

"You don't want to communicate something every day, probably, but you want to figure out what works and how often do your shareholders want to talk to you," he says. "Maybe some segment of your shareholder base wants to talk to you more than a different shareholder base.

He suggests firms develop a plan to schedule frequency and the types of content they will produce.

"You always want to improve from where you are today, so figure out where you are today in terms of your communication and figure out what your competition is doing differently and better than you," he says.

"See where you actually want to be on that continuum. You may not want to match the competition exactly, but you can definitely take ideas that are working for your competitor. Then come up with your own game plan. For example, you may want to shift away from text only- or words only-shareholder reports."

Sondhelm adds firms should be thinking about using multimedia tools like videos and webinars, and where they will actually distribute such content.

"A lot of firms still make their prospects go to their website for these shareholder reports. Now, investors are getting information from many sources; sources that they like best - it could be the news media, or LinkedIn, or Twitter or a blog - so it's very important for your content, for your shareholders communications, to be where your investors are."


Firms should also consider outreach in more manageable chunks, says Marie Swift, CEO of Impact Communications, a public relations firm servicing the financial services industry.

"Consider, for instance, a series of content on separate web pages, or something you could unfold in a flip book in a live setting with tangibles, so that people can digest in absorbent chunks and go deeper if they want to," she says.

Graphics and illustrations are obvious, but they need scrutiny too, Swift says.

"Not all charts are created equal, so do some testing to see if people can understand what it is you're putting in the charts before you put them to paper and start mailing them out."

Leading material should not be glossed over either, Swift adds.

"The cover letter and the front of the shareholders' report is going to make a big difference to help people understand the mission and why they would want to take an interest in following through with what might look like difficult content and why they would even want to send back their proxy vote," she says.

"Having that mission-oriented statement from the founder, the chairman or whoever the face of the organization is can make a big difference to set the context."


Firms should also be mindful of not only their shareholders, but also their advisors as an audience, says CircleBlack's Michel. "There is a huge number of RIAs voting on behalf of their customers and it is important for these companies to connect with them."

Firms used to doing things one way will question the need to change, but Michel says there is an engagement benefit.

"Technology has allowed companies to reach out to their constituents to see what matters to them the most," he says. "Anyone can survey their audience on a frequent basis. If they can find ways to communicate on issues outside of just voting, and can communicate about topics more broadly related to the company's business, shareholders turn into stakeholders." 

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