3 Ws & H of Financial PR - What, Why, Who & How

Friends, Thank you very much for taking out time from your very busy schedule to read my blog(s). Sharing PR knowledge with you with finesse has become my passion now and I really feel encouraged after reading your feedback in the comments column. Today I’m happy to present my 82nd blog - 3 Ws & H of Financial PR – What, Why, Who & How?

Financial PR or Financial Relations or Shareholder Relations or Investors Relations primarily focuses on public relations concerning financial, investment and other related matters.  The objective of Financial PR is to consistently keep the company appearing in a good financial light and to ensure that the company continues to meet its requirements that prevent alteration of that positive perception.

Financial PR is an important function of an organisation, company, or a corporate that attempts to portray its investments and financial state in the best possible light. Financial PR provides information mainly to business journalists and related publics i.e. investors, stakeholders and depositors.

Financial PR is concerned not only with matters of corporate image and the cultivation of a favorable financial and investment environment but also with legal interpretation and adherence to Securities and Exchange regulations and other government regulations, as well as with the Disclosure requirements of SEBI. Its practitioners, therefore, include lawyers with expertise in such areas as tender offers and takeovers, public offerings, proxy solicitation, and insider trading.

A fundamental technique used in Financial PR is to identify the target audience, and to tailor every message to appeal to that audience. It can be a general, nationwide or worldwide audience, but it is more often a segment of a population.

Financial PR promotes communication among target audience on various financial topics such as funding; risk management; trends in banking and cash management; the perception of the credit worthiness of the industry; and the strengthening of relationships with institutional investors, rating agencies, investment bankers, commercial bankers and regulatory authorities.

Who are the Financial Public?

Identification of financial public in specific terms is a pre-requisite for effective financial public relations. Financial Public is that public who is involved or is a part of any organization that attempts to portray the company's investments and financial state in the best possible light. Financial Public is also defined as the one who invests in organization in financial terms. The activating element in any business is finance. Financial public includes Financial Journalist, Financial Analysts, Brokers, Bankers, Investors, stakeholders, shareholders etc. To make a decision on which stock or bond to buy, investors need information and many do some research before investing. That is where the Financial PR function steps in. Good media coverage also reflects effective Financial PR.

Financial Public…..

a.      Financial Journalist

Financial journalist or correspondent is defined as the one whose main purpose is gathering information about current events in the economic life of the country. They may also cover processes, trends, consequences, and important people, in business and disseminate their work through all types of mass media.

b.     Financial Journalism

Financial journalism is the branch of journalism that tracks, records, analyzes and interprets the economic changes that take place in a society. It could include anything from personal finance, to business at the local market and shopping malls, to the performance of well-known and not-so-well-known companies. This form of journalism covers news and features articles about people, places and issues related to the field of business. Most newspapers, magazines, radio, and television news shows carry a business segment. However, detailed and in depth business journalism can be found in publications, radio, and television channels dedicated specifically to business and financial journalism.

c.      Financial Analyst

A Financial Analyst, Securities Analyst, Research Analyst, Equity Analyst, or Investment Analyst is a person who performs financial analysis for external or internal clients as a core part of the job. Financial Analysts often compare financial ratios of solvency, profitability, growth, etc.

Financial Analysts use fundamental analysis principles and at the end of the assessment of analyzed securities, they would provide a rating recommending an investment action, e.g. to buy, sell, or hold the security. The analysts obtain information by studying public records and filings by the company, as well as by participating in public conference calls where they can ask direct questions to the management.

d.     Banker

A banker is a trader who buys money, or money and debts, by creating other debts, which he does with his credit exchanging for a debt payable in the future one payable on demand. The first business of a banker is not to lend money to others, but to collect money from others. A banker is a dealer in capital, or, more properly, a dealer in money. He is an intermediate party between the borrower and the lender. He borrows of one party and lends to another.

e.      Broker

A broker or stockbroker is a regulated professional broker who  buys and sells shares and other securities through market makers or Agency Only Firms on behalf of investors. Services provided by brokers on a stock exchange must be made between two members of the exchange.

Media of communication with Financial Public…

a.      Annual General Meeting (AGM) is a best opportunity to communicate directly with shareholders. It is committed to efforts to establish more effective ways of communicating with the shareholders around the AGMs. Shareholders are informed of the annual general meetings through notices published in the newspapers or through circulars. To encourage more shareholder participation, AGMs are held at a central location that is easily accessible by most shareholders.

b.     Internet and other electronic means of communication have become more accessible to investors; the company continues to leverage such means in order to achieve a greater reach to investors, especially those who are outside the country and in different time zones. The aim is also to facilitate investors’ online information gathering process by providing easy-to-access financial and non-financial information, resources and tools. For instance, a company includes transcripts of the media and analysts conference held for the announcement of their full year results in their Shareholder relations website to facilitate investors’ navigation through the various topics discussed at the conference.

c.      Analyst meets and Press meet at the time of announcement of results are also important media of communication with the target audiences.

d.     News letters on a regular basis from Investors relations dept. are also good for communication.

e.      Press release for time to time insertion of news about the company’s growth prospects and interviews of CEO / CFO in the leading financial newspapers and magazines are also good source of communication.

f.       Annual Report Annual Report is a comprehensive document on a company's activities throughout the preceding year. Annual reports are intended to give shareholders and other interested people information about the company's activities and financial performance. Companies listed on a stock exchange are required to report at more frequent intervals i.e. every quarter of the year depending upon the rules of the stock exchange involved. 

g.     Chairman Speech

A great speech starts with a great topic. It is so important that you select a topic that interests you, and you believe will interest your audience too. The general purpose of any speech will be either to Inform; Motivate; Persuade; or Entertain the target audience. Preparing the chairman’s speech for annual meetings, conference, etc. is responsibility of PR. It is the PR responsibility to provide written speech to chairman and tell him or her, way of delivering the speech.

h.     House Journal

The house journal is one of the oldest forms of public relations; the Americans being pioneers of this medium. A House Journal or style manual is a set of standards for the writing and design of documents, either for general use or for a specific publication, organization or field. The implementation of House Journal provides uniformity in style and formatting of a document.

House journals have been given a variety of names, such as Newsletters, Employee Newspapers, and Company Newspapers, but in effect they perform the same function. House journals are private publications and are therefore discussed separately from the commercial press. Over the years they have become open forms of management–employee relations.

There are also two distinct kinds of house journal: Internals for staff and Externals for outside publics. The two are distinct and should not be expected to serve the dual purpose of serving, e.g. employees and customers. House publications are not confined only to the world of commerce and industry. Private magazines and newspapers are published by almost every kind of organization, whether it is in the public or private sector, commercial or not-for-profit.

i.        Corporate Film

A corporate film is often intended for a specific purpose in a corporate or B2B or B2C environment and viewed only by a limited or targeted audience. This may include product, service or company promotional films, training films and information films. Corporate film production is frequently the responsibility of a company marketing or corporate communications dept. Examples of corporate film include staff training and safety films, promotional films, brand films, and financial results films.

j.        Corporate Brochure

Corporate Brochure is defined as a booklet, often containing promotional material, information about services offered or product information of an organization. The Corporate brochure has a vital role to play in promoting the business and attracting new customers. It contains descriptive information or advertising. All the organisations or those who are new into the business prepare their corporate brochures to promote their business, products and services. It helps them to get established into the market, built up good image and increases their members as well as customers.

To sum up;

PR plays an important role in arranging annual general meetings, analyst meets, press interviews, corporate exhibitions, production of films and visits of the media and other dignitaries to the organisation to build good reputation and relation of their organization with important public, organizations and its members. PR also creates and place newsworthy information in the news media to attract attention to a person, product, or service. Maintaining healthy relationships with shareholders and others in the financial sector to influence legislation and regulation is also the part of PR.                                          

Thank you for reading the blog.

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