The Evolution of Shareholder Communications

Russ Alan Prince of Financial Advisor Magazine and Sherry Moreland from BetaNXT discuss the digitization of information flow between advisors and investors, which aims to improve engagement throughout the investment cycle.

Sherry Moreland is president of Mediant, a BetaNXT business. BetaNXT, a provider of connected data solutions for the wealth management industry, acquired Mediant in 2023. Ms. Moreland led Mediant’s rapid growth and innovation for 15 years as its president and chief operating officer. With more than 30 years of experience, her extensive background spans shareholder services, broker-dealer operations, retirement plan administration, mutual fund processing and more.

Russ Alan Prince

How is the shareholder communications landscape evolving and what does this mean for financial advisors?

Sherry Moreland

Shareholder communications today are more complex than ever, presenting both opportunities and challenges for financial advisors to deepen their client relationships.

In the past, the discipline of shareholder communications was limited to annual reports, mailed notices and in-person shareholder meetings. Information was largely one-way and carefully moderated. These required communications were intended to give shareholders a voice, but many were put off by this one-way treatment. Advisors focused on interpreting these reports and guiding clients through major decisions like annual proxy voting or corporate actions elections.

With advances in digitalization, corporate and fund issuers are expected to be more transparent. Broadcasting is out, engagement is in, and the emerging reality of shareholder engagement is real-time and interactive without an editor to determine what gets published or not, regardless of factual accuracy. Omni-channel communications — email, mobile notifications, texts, apps, social platforms, etc. — are necessary to reach and engage with today’s shareholders. While real-time data and the accompanying insights are valuable, they can also create an overwhelming sense of “information overload.” This makes it challenging for investors to identify what’s relevant to their portfolios and which communications are the most important or urgent for them to review.

Financial advisors must act as effective guides to help shareholders filter the noise and understand the information. Advisors need to be able to identify what requires immediate attention — for example, around shareholder voting or corporate actions elections. They need to be able to empower the shareholders, so they have the confidence and peace of mind to know they are making well-informed decisions.

Russ

What is BetaNXT, and how is it innovating to meet the demands of a more complex and dynamic shareholder environment?

Sherry

Our mission at BetaNXT is to power the future of connected wealth management infrastructure solutions in order to enhance the digital-first experience for financial advisors and their clients. We provide an ecosystem that creates a comprehensive, front-to-back solution for managing proxy services and other shareholder communications, as well as securities processing, tax reporting and cost basis accounting.

Our investor communications business exemplifies this digital-first approach by providing technology-enabled solutions that ensure regulatory compliance while enhancing engagement. Our solutions cater to banks, brokers, corporate issuers and funds, helping to improve their company, shareholder and advisor experiences.

By modernizing and digitizing the flow of important information between advisors and investors, we strengthen engagement at every point in the investment cycle. This includes everything from corporate actions processing and annual shareholder meetings to proxy statements, confirmations, and tax documents.

For example, our MIC Wealth Manager solution offers a detailed dashboard for advisors and investment managers. The tool streamlines workflows and enhances productivity with efficient online tools for proxy voting, corporate actions elections and shareholder communications. It simplifies routine tasks and ensures compliance deadlines are met through timely alerts. The MIC Wealth Manager dashboard highlights critical information and time-sensitive activities, such as the number of positions that must be voted upon by a certain cutoff date, and provides alerts that prioritize areas of opportunity for advisors to consider for their clients.

Our interactive client statements provide a comprehensive view of a client's account activity, performance and other financial metrics along with actions to take on their holdings. This provides another tool for advisors to effectively manage their clients' investments and maintain strong client relationships.

Our API solutions enable clients to tailor their in-app experiences, ensuring that every interaction is not only compliant with regulations but also engaging and effective. By integrating seamlessly with existing systems, our APIs provide a robust framework for automating communication processes, personalizing content and maintaining comprehensive oversight through our state-of-the-art compliance and monitoring tools.

We also offer a suite of omnichannel solutions that make it easier for corporate issuers and funds to connect directly with retail investor shareholders, engaging them year-round to encourage participation and voting in annual meetings.

Russ

What trends are influencing the evolution of shareholder communications?

Sherry

Despite the increasing online activities of financial advisors and investors, a significant portion of shareholder communications is still delivered in print. Recently, the securities industry has shown strong support for changing SEC policy to make e-delivery the default method for document delivery. Digital adoption, cost pressures and evolving shareholder expectations have highlighted the need for regulators to adopt e-delivery. This change is long overdue, and we anticipate it will be addressed by the incoming administration.

The integration of AI and data insight tools is enabling shareholders to access and understand information on demand, simplifying the complexities of financial markets and investment performance. This empowers investors to make more informed decisions. In that vein, we are collaborating with our clients to develop a new platform, DataXChange, which will help wealth enterprises optimize their data and operations to enhance the guidance they provide to investors.

Additionally, the use of apps is transforming investor interactions. Apps are evolving to offer a streamlined, engaging experience that combines real-time data, personalization, interactive tools, in-depth insights and AI-driven decision support.

Ultimately, these trends will create a richer experience for the investor. By embracing this digital transformation, advisors can strengthen their client relationships and better meet the evolving needs of their clients.

Source: Financial Advisor Magazine