How small caps can communicate better with investors: Three tips from an award-winning financial planner

Small caps need to do much more than just issue an ASX announcement at the right time to successfully communicate with investors.

It takes a strategic approach and the right tools to build a loyal and engaged community of people who are so invested in your company that they sell your stock last.

As specialists in the many nuances to effective investor relations, we at IR Department were intrigued recently to learn that Caboodle Financial Services surveyed financial advisers to get their take on how small caps could communicate better to build a stronger connection with their investor community.

Caboodle’s Managing Director and award winning financial planner, Peita Diamantidis spoke about the findings recently at the event Amplify Your News: Using Digital Media to Grow Your Investor Following, hosted by IRM and Computershare, at which our own Managing Director Jane Lowe was a panel speaker.

Here are three big take-aways from Caboodle on how small caps can communicate to strengthen their investor relations:

3.    Communicate your social conscience

“This one was the big surprise,” Peita said. “And it came in as the third most important thing investors look for when analysing small companies, after management experience and a company’s vision.”

Your social conscience could be your environmentally friendly office, human rights support, or community involvement. Can’t think of anything off the top of your head? It’s time to actively find something socially to care about and invest some company resources in.

2.    Communicate using plain English

We’re so big on this one: drop the industry jargon.

It might seem like a no brainer to use words that people understand but companies get stuck when it comes to industry jargon. Take the term ‘market volatility’ for example. Being a financial services firm, Caboodle used that term all the time and with people who they thought would clearly understand its meaning in the context of financial matters. Turns out that a lot of people thought volatility referred to a market that was angry! Caboodle now uses the word ‘wobble’ instead.

Using words that anyone can understand is important because if your audience doesn’t understand what you’re saying, they can’t connect with what you’re saying.

Peita’s suggestion?  If you want to really test your language, get your least experienced employee or work experience person to go through your materials and highlight anything they don’t understand.

1.    Communicate in stories, not information

I could write an entire blog post (or several) about this one – and I will – but for now, let me just reiterate some points that Peita made that really resonated with me.

Investors are humans, and humans connect with stories that make them feel things. 

“We need companies to be like Netflix – deliver the stories investors want in a format they can easily access,” Peita said. “We need to communicate with emotions – markets are an emotional beast. How do we feed that emotion? Through storytelling. With emotional storytelling, you build a connection so strong you are the last stock they sell.”


Are you having trouble communicating effectively to investors and media?  If so, get in touch.