How does technology improve shareholder engagement and proxy voting?

Chris Nobles, Division Executive, Mediant at BetaNXT, discusses how technology impacts shareholder engagement, as well as its relevance for investors and financial advisors.

Transcript

Chris Latham

Welcome Chris Nobles, division executive at BetaNXT Investor Communications. What exactly does technology have to do with shareholder engagement?

Chris Nobles

That’s a great question, Chris. You know, for years now, market access for shareholders has gotten better and better. But the issue is that accessibility doesn't just stop with owning a position in a public company. It's a big part of it is, “How do I then exercise my rights?” And what technology is doing for us now is it's enabling us to take many sources of data and information and make them available to investors, so that they know and understand that they have the right to vote proxies or vote their shares at an annual meeting. And they understand what that is, how to do it, and what the impact it will have.

The other thing is that for years our industry has talked about delivering hyper personalized communications, and that's always been a challenge. But today in our technology, everything an investor consumes is highly focused on their interests and it's based on their past behavioral actions. Technology is allowing us now to introduce those same capabilities into the investment space. So, investors are now getting more personalization around “What do I care about? I've invested in this stock. These things are happening to the market.” AI is allowing us to pull in information, and then in a very timely and quick manner, make information available, specific to what each individual investor is interested in.

Chris Latham

And there's also a regulatory component to this, for example, involving the Securities and Exchange Commission. Can you tell us about that?

Chris Nobles

Well, there's a lot of pressure right now on asset managers and fund companies specifically to allow investors who own shares in those funds to have their voice heard. You hear about pass through voting or voting choice programs. The idea is that for a long time now, institutional businesses have more or less controlled the outcome of proxy meetings because of the high aggregated share counts that they are responsible for.

In their funds, that's just not flying anymore. Investors, as they become more and more accustomed to owning stock in in equities, understand that they want to see their personal values shown and respected by the organizations that they're investing in. That’s putting a lot of pressure on advisory firms. So, the regulations are important, and it really is a very interesting time right now to be in the proxy space because we're being challenged more and more to expand accessibility in areas that we haven't focused on before.

Chris Latham

And how does BetaNXT’s services factor into this?

Chris Nobles

Well, first and foremost, there are only a handful of organizations that facilitate proxy voting to beneficial shareholders, and we are one of those. We have a large number of broker dealers on our platform and therefore it's our responsibility to facilitate the information from public companies through those beneficial broker dealer accounts down to the individual investor. And that's one of the ways we play.

We're a fintech leader and what that means is that we have to make sure that we're using AI and new technology in a way that drives the outcomes that are beneficial to all parties, right? Issuers need votes. Votes have to come from the retail shareholders, and that means the information has to pass through in a timely fashion. It has to be accurate and it has to be actionable. And BetaNXT is a core part of the US and global financial system and that's our responsibility.

Chris Latham

One final question. If you're a financial advisor that serves retail investors in clients, why should they be aware of this and care about all of this?

Chris Nobles

Well, it’s about trust, right? Investors are going to receive information and they're going to go to their advisors looking for explanations, because it's not always very clear why you're getting communications. And many times when an investor is being represented by an advisor in a discretionary manner, they may not understand all of their investments on a daily basis. So that investor/advisor relationship is extremely important and it’s one of the things we focus on at BetaNXT. When we talk about accessibility, it's not just getting information to the end investor, it's doing it in a way so the advisor has visibility. It becomes a part of that relationship—it empowers investors, it builds trust between the investor and their advisor. It's better for the overall public capital markets.

Chris Latham

Chris, I learned a lot and I think a lot of other people have as well. Thank you very much for your time.

Chris Nobles

Wonderful. Thank you for having me.

Source: LinkedIn