We’re all dealing with the same headwinds in the financial sector right now: geopolitical tensions, inflationary pressures, rapid technological shifts, and shifting regulatory landscapes.
Each of these factors impacts investor confidence differently, from eroding risk appetite to heightening demand for stable, long-term value propositions. And the result, whether we like it or not, is complete market volatility.
At times like this, the role of investor relations professionals becomes more important than ever. Confidence is the cornerstone of investment, and maintaining investor trust is absolutely critical to success.
It’s your job to build that trust. And though it can be challenging, it’s not impossible. There are strategies and considerations that can help your organisation effectively communicate and strengthen its relationships with investors —even during challenging periods.
To unpack those strategies, we spoke to Marina Zakharova de Calero, M&A Integration lead and a former Head of IR at Hyve Group, a member of IR Magazine’s Global Advisory Board and a host of Europe’s largest independent peer-to-peer network for Senior Heads of IR ‘IRO Coffee Break’. Using her insight, and our own experience within the market, we’ve put together our guide to building and retaining investor trust in volatile markets.
Transparency and reassurance may seem at odds, but when it comes to investor communications, the two need to coexist. On one hand, your investors expect honesty, even when the news isn’t favourable. On the other hand, fail to reassure those investors that adequate steps are being taken to navigate challenges, and you’ll lose them.
The key lies in openly sharing potential risks, while keeping investors informed about mitigation strategies, and a realistic path forward. The tone and cadence of communication are equally important — while overly optimistic narratives may appear disingenuous, an overly cautious approach can unnecessarily alarm stakeholders. Marina’s advice is simple:
“It’s about being candid about challenges and clear about those that are within company’s control, what the management is doing to address them, and what lies outside its control and what levers are in place to mitigate their effect.”
Frequent and meaningful engagement with investors is vital during challenging periods, when investors are more likely to act cautiously – or even lose faith in a project. A survey by PwC found 85% of investors feel more confident when they hear directly from company leadership during volatile periods.
Hosting regular updates via webinars, earnings calls, or Q&A sessions gives investors the opportunity to hear directly from leadership, increasing the likelihood that they’ll feel included and up to speed, and in turn, fostering their trust in you.
But it’s important to be strategic with this engagement. Thoughtfully crafted narratives that acknowledge the difficulties while reinforcing the company’s strategic vision should be combined with data-driven insights and case studies. This kind of approach can showcase your company’s resilience.
Digital communication channels have revolutionised investor relations and can make a significant difference during turbulent or trying periods. Real-time updates via social media, virtual investor events, and tailored content delivered through platforms like IR apps enhance accessibility and immediacy.
In other words, you can use these tools to make sure you’re addressing any investor concerns more or less instantly. In the long-term, you can also use them to maintain a steady stream of communication and strengthen your relationship on an ongoing basis. Organisations need to proceed with caution, however.
“The way we consume information has changed dramatically in recent years. Our attention spans are shorter, and investors are not immune to this trend. Digital channels allow for timely delivery of key information on one hand, but also expose investors to more noise and misinformation,” explains Marina. There’s a need to curate and control content carefully.
“As long as your company website is positioned as the main source of accurate, clear, and timely public information with other distribution channels linked to it, investor trust in the source of information will follow.”
ESG factors play a pivotal role in bolstering investor trust, particularly in volatile markets where long-term stability becomes a focal point.
According to Edelman’s 2023 Trust Barometer Special Report: Institutional Investors, 64% of investors say they are more likely to trust a company with a strong ESG strategy, even during economic volatility. Transparent reporting on environmental, social, and governance commitments reflects a company’s dedication to sustainable value creation.
Furthermore, demonstrating progress on ESG goals amidst uncertainty reinforces the company’s ability to weather future disruptions. A report by McKinsey shows 83% of institutional investors believe companies prioritising sustainability and governance are better equipped to build long-term trust and resilience.
Looking ahead, trends such as the integration of AI in investor relations, enhanced personalisation in communication, and greater focus on impact investing will shape strategies for building trust.
For Marina, these key trends are likely to remain on the horizon in 2025 and beyond:
“ESG reporting requirements will only intensify. The need for detailed verifiable and assured by 3rd party ESG disclosures – beyond just financial performance – will become a standard practice in a few years. On top of that, AI is gaining momentum incredibly quickly. We’re still in the early stages of using AI to build trust. Undoubtedly, day-to-day IR processes will become more efficient with AI developments and as long as organisations don’t lose sight of a need for a human overlay to ensure accuracy of the outcomes, investors trust will gradually build up.
And finally, geopolitical uncertainty and economic instability isn’t going anywhere. It’s the world we live in. This will likely keep companies on their toes. Organisations should invest in solid crisis comms strategies and rehearse various scenarios in advance.”
This approach is not only about navigating the present but also about building a resilient foundation for future growth and investor confidence. Volatile markets demand a renewed emphasis on clarity, adaptability, and empathy in investor communications. By embracing transparency, leveraging technology, and staying attuned to evolving investor priorities, organisations can turn uncertainty into something positive.
It’s a challenge. But organisations in the finance sector have a unique opportunity to foster enduring relationships and deepen trust at a time where many are struggling to do so. And it’s entirely possible to do, with the right strategy.
To chat more about your strategy, or the current financial landscape, don’t hesitate to get in touch.
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