Value of Outsourced Investor Relations & 10 Benefits of Outsourced IR

Outsourced investor relations can provide your company with several advantages, which can ultimately help to increase your company’s profitability. If you are looking for a cost-effective way to manage your investor relations, then outsourcing may be the best option for you.

When you outsource investor relations, you will have access to a team of experienced professionals who can offer you advice and guidance on how to best manage your investor relations. This can be extremely valuable for your company, especially if you are new to the world of investor relations.

In addition, outsourced investor relations can also help to improve communication within your company and increase your company’s reach. They can also help you to be prepared for the unexpected. Having a team in place that understands what a crisis communications plan should include for example is a great benefit for a company in the public sector.

Investor Relations is an important role for a public company as the IR specialist is responsible for managing the communications between the company and its investors. This includes responsibility for communicating with shareholders, potential investors, and the financial community at large.

The goal of an effective investor relations program is to ensure that all stakeholders have access to accurate and timely information about the company to make informed investment decisions.

Investor relations is a critical function for public companies but can be costly. Many companies are outsourcing this function to save on costs.

Why Companies Outsource Investor Relations

There are many benefits of outsourcing investor relations. One major benefit is that it can help reduce operational costs. This is because most investor relations firms operate on a retainer basis, which means they are paid a monthly fee. This allows companies to save on the costs associated with full-time employees, such as benefits, salaries, and bonuses.

Another benefit of outsourcing investor relations is that it can help improve communication with shareholders. This is because IR firms are experienced in dealing with the investment community including shareholders and understand their needs and concerns.

Biotech startups for example are experts in research and development however they often lack the ability to explain their intricate scientific basis in an easy to understand way for investors. A biotech investor relations firm like Futurist Society understands those needs and has multiple examples of investor relations case study materials highlighting this benefit.

They can also help develop better shareholder communications strategies. From institutional investors to small, retail shareholders, an outsourced IR firm can provide valuable insights and feedback to help a company better understand its investors.

The IR consultant managing director handles media relations specific to capital markets including preparing and distributing press releases to the business and financial media. They work with the company’s senior management team including the CEO on developing messages for earnings calls, annual reports, and other disclosures.

Many times these consultants have extensive experience working in-house at public companies so they understand the ins and outs of dealing with shareholders, analysts, and the investment community. Our independent advice and support services at Futurist Society as an external provider helps microcap, small-cap and mid-cap companies receive the treatment of a full IR team.

Cost Savings of Outsourced Investor Relations

One of the main reasons companies outsource investor relations is to save on costs. Investor relations can be a costly function, particularly for small and mid-sized companies. By outsourcing IR, companies can reduce their costs by as much as 50% highlighting even more of the value offered by small cap investor relations firms.

This is because most investor relations firms work on a retainer basis, which means they are paid a monthly fee. This allows companies to save on the costs associated with full-time employees, such as benefits, salaries, and bonuses.

An experienced IR firm can be more effective and efficient in communicating with the investment community which can result in a lower cost per transaction. Firms that outsource IR typically operate on a monthly retainer basis which can save the company money compared to the cost of hiring a full-time employee. An IR firm will have access to a broader network of contacts which can save the company money and time.

Investor Relations Function & The Role of Investor Relations Specialists for Public Companies

The role of the investor relations specialist is to manage the communications between a public company and its investors. This includes responsibility for communicating with shareholders, potential investors, and the financial community at large.

The goal of an effective investor relations program is to ensure that all stakeholders have access to accurate and timely information about the company to make informed investment decisions. Top investor relations firms like Futurist Society know the detailed elements of a strategic communications plan helping catapult the audience message in front of eager investors.

An investor relations specialist typically works within the marketing or communications department of a public company. He or she may report to the head of investor relations, the chief executive officer, or another senior-level manager.

In small organizations, the investor relations specialist may be responsible for all aspects of the program. In larger organizations, there may be multiple specialists on the team, each with specific responsibilities.

The investor relations specialist is responsible for creating and executing the investor relations strategy. This includes developing and implementing plans to communicate with shareholders, potential investors, and the financial community. 

The specialist also works to build and maintain relationships with these groups. In addition, the investor relations specialist monitors news coverage of the company and analyzes how it affects the company’s stock price.

The investor relations specialist must have excellent written and verbal communication skills. He or she must be able to effectively communicate complex financial information in a way that is easily understood by non-financial audiences. The specialist must also be able to build relationships with key stakeholders and influence their investment decisions.

The investor relations specialist position is a demanding and challenging role that requires a high level of skill and experience. Those who are successful in this role are typically hard-working, detail-oriented, and have a strong understanding of the financial markets.

10 Benefits of Outsourced Investor Relations

Investor relations specialists have unique skills and knowledge that can help your company effectively manage its investor relations. When you outsource investor relations, you will have access to a team of experienced professionals who can offer you advice and guidance on how to best manage your investor relations. Learn more about investor relations as a whole in our Investor Relations 101 Guide.

Outsourced investor relations can provide your company with several benefits, we highlight 10 of those below.

1. Maximized Efficiency and Productivity

Outsourcing investor relations can help your company to become more efficient and productive. This is because you will have access to a team of experienced professionals who can help you to manage your investor relations more effectively. The internal capability for IR service for smaller market cap companies is often time stretched thin and the service is overlooked.

2. Cost-Effectiveness

Outsourcing investor relations can also be cost-effective for your company. This is because you will not need to hire full-time staff to manage your investor relations. Most agencies work off retainers as we do here at Futurist Society, where you are left with minimal billing detail rather than hourly billing rates. For an OTC Markets listed company having a fully staffed OTC Markets investor relations firm on retainer provides a tremendous benefit in value services at a fraction of an employee cost.

3. Access to Expertise

When you outsource investor relations, you will have access to a team of experts who can offer you advice and guidance on how to best manage your investor relations. This can be extremely valuable for your company, especially if you are new to the world of investor relations. From market intel to detailed explanations of the industry, top investor relations firms provide companies with agency services that are consistently striking success.

4. Added Flexibility

Outsourcing investor relations can also provide your company with increased flexibility. This is because you will not be tied to a specific team or location. You will be able to work with a team of investor relations professionals who are based in different parts of the world helping you strike the right balance of pre-market, post-market, and trading hours presence.

5. Exponential Reach

Outsourcing investor relations can also help to increase your company’s reach as they can help you to connect with more investors and potential investors. From retail investors to institutional buyers and analysts, the importance of reaching more users is the primary function of operations for fiscally responsible companies.

6. Access to Latest Technology

When you outsource investor relations, you will have access to the latest technology. This can be extremely beneficial for your company, as it can help you to manage your investor relations more effectively. Many agencies have a large number of clients and access to a wide range of tools.

IR has many changing needs and working with companies dedicated to the service provides access to tools and insights often not available or financially feasible in a financial year for some companies.

7. Improved Communication

Outsourcing investor relations can also help to improve communication between your company and its investors. From public relations experts to former journalists, the right agency will have a wealth of experience in communicating with investors. From content marketing plans to investor relations case study, leave the communications to the pros with outsourced IR.

8. Access to a Wide Network of Investors

When you outsource investor relations, you will have access to a wide network of investors. Many agencies have existing relationships with a wide range of investors, which can help you to connect with the right people quickly and efficiently. This can be extremely beneficial for your company as it can help you to raise capital more effectively.

9. Increased Profitability

Outsourcing investor relations can also help to increase your company’s profitability.  This is because a well-managed investor relations program can help you to raise capital more effectively, which can in turn help to increase your company’s bottom line.

10. Access to a Global Market

When you outsource investor relations, you will have access to a global market. This is because many agencies have a network of international investors. This can be extremely beneficial for your company, as it can help you to raise capital from a wider pool of investors.

How To Find The Top Investor Relations Firms to Outsource Your IR

If you are considering outsourcing your investor relations function, there are a few things to keep in mind. First, make sure to select a reputable and experienced firm. Second, be clear about your expectations and objectives for outsourcing investor relations. Finally, be prepared to pay a higher monthly fee for an outsourced IR firm than you would for a full-time employee. However, the cost savings and improved communication with shareholders may be well worth the investment.