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📚 Deep dive on retail investors with Kimberly Esterkin - President of NIRI LA

Author of 'Look in the Mirror You’ll See a Retail Investor - the importance of redefining and reconnecting with retail investors'

For this week’s Roundtable Roundup, we sat down with Kimberly Esterkin, VP of Investor Relations at ASGN and President of NIRI - Los Angeles, to discuss the article she recently published in the spring ‘23 edition of IR Update titled, Look in the Mirror: You’ll See a Retail Investor - the importance of redefining and reconnecting with retail investors.

Click to read the full article

We asked Kim what initially inspired her research, misconceptions she anticipated addressing and key learnings for IROs to jump start their retail investor strategy. The IR Update article features quotes from the Stakeholder Labs team, Seven Seven Six General Partner Alexis Ohanian, Witz Ventures Co-Founder Austin Hankawitz, executives from, eToro, and more…

What inspired your research & article on retail investors?

Kim: I feel like it's been brewing for a number of years now. In the heart of Covid the President of NIRI National reached out to our CEO and asked if I'd speak to the Wall Street Journal because they were running an article on the meme stocks and connecting with retail investors and wanted to see how the IRO was handling.

And I said, "Great. I would love to." And it was a great piece, it was in the CFO Journal. And I came out of the article happy, but then I started reading a lot more on these meme stocks and retail investors. I was getting a little unhappy in all honesty - I felt like the media was portraying retail investors wrong. I felt like they were being portrayed as unsophisticated, as rash, inexperienced and I didn't really quite feel that way in my experience with retail. And I felt like I was gonna have to challenge that view sometime - I wasn't sure when.

Earlier this year, I was asked to speak at my older son career day and teach third graders to eighth graders about Investor Relations. Now, I could hardly explain to adults what I do sometimes... But as I was doing that and thinking about like, how am I gonna explain this to them, I started thinking more about like, "How do I explain myself as an investor?" And that's how this concept of the mirror like looking at ourselves and figuring out who indeed is a retail investor.

And then I met you guys [Stakeholder Labs] at just about that same time that I was asked to speak at my son's school and I said, "wow, like others feel the same way, like others feel as if retail got a bad rap." So, I remember I came to you and Max and said, "I'm thinking about coming to fruition with this idea I have of redefining the retail investor."

I started bringing it up to others in the space who have worked on promoting their own retail strategy as Invest Relations Officers, or have platforms that are trying to promote the industry as a whole and then the story unfolded.

What expectations did you have going into your research based on your own experience in IR?

Kim: I expected a lot of misconception going into it. I was very pleasantly surprised. I got more people bothered by these misconceptions than those that we're on board with them. I was happy about that because I realized this is like the topic that should have been talked about, but was not talked about and instead we talked about how many people were in chat rooms in the middle of the night feverishly buying and selling stock instead of what I felt was a real retail investor.

I talked to two IROs who were in vastly different industries and also had vastly different IR experience. One was a more recent IRO who came out of the sell side. One had been a career IRO. One worked in electric vehicles and batteries. Another worked in the agriculture and farming industry. But - both of them felt and adamantly agreed you have to incorporate retail into your IR strategy. So I think there's been a real shift in mindset amongst the IROs at the importance of retail.

And it's not just the IROs, they spoke to me about its importance to the Board of Directors who bring it up and their Executive teams. So that was one of the big things I learned.

The second - Stakeholder Labs was very kind to introduce me to Katie Perry of And, in addition to being a trading platform, has come up with a tremendous amount of research firsthand on who is the retail investor and their demographics. And so Katie Perry has this quote in my article, which I just wrote down to share today because I thought it was a good one. She said, "now 63% of investors say they are more plugged into fundamental analysis, company news, earnings, and market news than they were a year ago. More than half are diversifying their portfolios, following the volatility in 2022, and a majority whose first investment was a meme stock or a cryptocurrency went on to diversify". So what did that mean?

Retail investors are more educated than they've ever been. They are personally driving their self-education, right? They want to dig in, they wanna listen into your earnings calls. They wanna listen to the CEOs doing these panels and they're diversifying. They're not just buying GameStop and AMC and calling it a day and wreaking havoc for the CEO of those companies. Maybe they started there because that's where the bandwagon was going, but now they've invested in other areas. So I think those were some of the interesting ones is the change in the mindset of IROs and Executive teams and Boards and the self-education that's been driven amongst the retail.

Based on your research and interviews, what would be your top recommendations or best practices for investor relations officers to effectively communicate and engage with retail investors in today's evolving market?

Kim: I think the best advice was a quote that your colleague Max gave me for the article and Max said, "you need to meet the investor in their own world". So you need to understand where your investors are consuming their information and how they are consuming it and it's not necessarily about creating something new. It's about tailoring your message, right? Taking what you're sharing with the institutions and making it more accessible for the everyday retail investor. IROs as we talked about before, the job is 24/7. We have so much work to do.

You can continuously find work, and my whole goal is not necessarily to create something new, to create more work, but to figure out how to leverage things you're already doing and put it into your toolbox, right? Put it into what you're doing on a daily basis and make it part of that overall platform.

So understanding really where your investors are consuming information and how they're consuming it. So you know, if it's a traditional press release, great. That's something IROs do every day. But maybe it's a social media post. Maybe it's a live chat on Reddit - a AMA with one of your executive team.

I think Max, one of my favorite quotes he also said was, " investor days will one day be like a music concert," right? Like analysts and investor days could be like that an event. It's really reading the room, understanding where people are consuming their information and what makes it easy for them to consume.

And then using what you're already creating on behalf of the institutions and then modifying it and making it so everyone from someone who's a former portfolio manager and is doing all this statistical analysis to, someone's grandmother who knows their child buys this shoe company can understand and make an educated guess on where to put their their funds.

When you think about your job in 10 years, how are you imagining it being different than it is today?

Kim: And what do I think all this means in the next decade? It's gonna become more difficult to understand how your company is being portrayed in the media, in the public, amongst shareholders.

It's all anyone's talking about right now is artificial intelligence and ChatGPT, and how is that gonna come into play? I am not of the camp yet that it says it's gonna replace humans. I do not believe that because I still really would like to continue my job.

But I do think, there's gonna be this immense need to manage and filter and sort and make sure that we're correctly sourcing information.

I'm ready for the challenge. I do not think it's gonna be easy but I think what I'm most excited is to see what tools are created over the next decade to help IROs handle this. To make it through this immense sea of information that's gonna be available. And for all the ways in which our own investors, whether they be retailer or institutions, are going to be able to gather that information.

So I just think it's gonna be this democratization of access as you talked about when we spoke Matt, but on fire. I dunno how else to explain it.

When you think about writing for and educating IROs, what is important for effective communication and making sure the message resonates with them?

Kim: I love educating on this field because I feel like there's very few coursework in it, right? You learn on the job. This is one of those moments and financial literacy, especially for kids, has always been a thing of mine.

So I've been going into schools as starting in preschool, teaching them to invest in blueberries versus pretzels and why.

But what I'd say is when I write for IROs, our job's really busy. So I am trying to figure out how I can add value without creating extra work or adding to the level of stress or time that they have to invest in whatever I'm writing.

So I always think about very strategic ways to approach something very, something that may not be black and white. Try to make it black and white. And what I mean by that is Really, how can I simplify my messaging? How can I give the step by step way to get through a challenge or understand a concept so that when you leave that article, you don't have to say, Hey, I gotta read that again because I didn't get it.

I always end my articles with the key steps that I think IROs need to take from it. What is it that I've taught you throughout my piece. And I think that's a good kind of lesson in general for investor communication. We should be thinking as streamlined and as focused as possible.

At the same time, trying to get as much information into a short space and then to remember to go back to some of the basics of IR. I think something would be similar for the best practices in marketing, which you came from Matt, you just want to have the building blocks present and so that the takeaways are easy, even if the concept is more difficult.

My article concludes, which, please read my article.... that's my, that's one of my shout outs. But my article concludes that retail investors are you and me, right?

They're Kim and Matt and we're not going away. So I would say I encourage all IROs to incorporate some type of retail strategy into your IR platform. And then I just wanna thank you Stakeholder Labs, you guys have supported me on this journey to redefine retail.

My article is a great entree into that, but I hope more start researching and really getting into this topic and encouraging the Investor Relations community to keep retail front and center. I hope that we have modified for the better who a retail investor is and shed a new light on them and at the same time encouraged others to do some more due diligence on who is your retail shareholder base and how can you connect with them.

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