Research distribution and investor engagement: reaching “Generation Netflix” and the retail investor

15 Oct 2021 / Insight

By Keith Hiscock

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The world of entertainment has been through a revolution, with catch-up TV and new ways to watch programmes, such as via the PC, tablet or mobile phone. We are at the start of a similar change in investment research, and research providers have a steep learning curve to climb.

• Post MiFID II, brokers no longer have universal access to professional investors.
• The importance of retail investors is being recognised, but the way in which they access research is poorly understood.
• Email engagement has grown, but most research providers struggle to use it effectively.
• Sending everything to everyone does not work – it’s a quick route to being treated as a spammer.
• Audio-visual content is increasingly the first point of access to an investment idea.
• Twitter is very influential in the retail market, yet naively harvested.
• Most parties fail to understand the difference between “push” distribution, which mainly addresses existing investors, and “pull” distribution, which targets new ones.
• Much research distribution comes from the age of the post room, and does not employ modern marketing techniques to turbo-charge investor engagement and reach new audiences.

Investor engagement will never be the same after COVID-19.

• COVID-19 has broken the traditional investor engagement model.
• Most analyst meetings will remain virtual, as will roadshows.
• Physical conferences are going to need a huge draw to be successful (think Barrack Obama in person).
• Just counting the number of investors on a call misses the point. It’s the total viewership of the content over time that matters, much as TV audiences are measured by adding catch-up viewers to live audiences.

Most of us have changed the way in which we consume entertainment content in the past 10 years. We decide when we want to watch something, and we are not tied down to a TV set, and new audiences, “Generation Netflix”, expect things to be different. We are at the beginning of a similar revolution in investment research distribution, which is little appreciated yet.