Financial Communication


Financial Communication


Communicating with the financial public is known as financial public relations. The financial public/audience are that public who are:-

  • the registered shareholders
  • The investing community including potential shareholders
  • The direct financial community consisting of banks and financial institutions
  • The employees and audiences who are connected with the organization
  • The financial and economic press which includes newspapers, trade journals, and other publications who create interest in economics and finance.

Function of Financial Communication Expert:-

  1. Liaison with executive management: – A financial communication expert usually liaise with – Board of Directors, Executive and Finance committee, Key officials and department heads, directors of public relations, industrial relations and investor relations.
  2. Financial publicity:- uncovering and developing news as per the interest of stockholders, develop relations with financial editors, create a financial press release, annual reports, and information about mergers, Interviewing media financial reporters to determine their needs.
  3. Stockholder Correspondence
  4. Conducting stockholder surveys and preparation of stockholder publications:- quarterly earnings statements, folders interpreting company policies, preparing biographical digests of executive officers members of the board of directors.
  5. Financial and Educational Advertising – prepare institutional advertising, including annual reports, advertisements, the announcement of acquisitions, opening and closing of plants and more.
  6. Planning the annual & regional meeting of the stockholders:- organizing program, selecting place of meeting, preparations for answers to questions and criticisms, offering gift packages of company products
  7. Working with security analysts: – questioning analysts to determine the extent of their knowledge of their company and attitudes towards the company, arranging analyst meetings with company’s executives and tours of plants and research facilities, preparing and distributing informational materials to analysts.

Tracing the Growth of Financial Communication in India:-

After independence, India has mixed economy models. The focus was on agriculture and industrialization. Many companies set up their business and got the funds through financial institutions to meet the government’s private sector investment targets.

But, that was the time as well when India also has to do work in capital markets to create the necessary support and channels to meet investment priorities. Government and RBI acknowledged that India has to work in this area. At present too, people are conscious to invest into the capital markets to support investment in infrastructure, business growth, and other development opportunities. Financial services businesses could do much more to develop investor confidence to build up capital market investment.

After the 1990s, we all know that suggested economic reforms have brought India into the mainstream. The concept of “LPG i.e. Liberalization, Privatization and Globalization had given the major push to businesses and connect India with the global markets with less interference. They have brought significant changes in India’s economy and brought changes in demographics, social and behavioural, and technology. Today, we are the 3rd largest economy in purchasing power index. The rank of India has also increased in the index of “Ease of Doing Business”. Today, India constantly talk about its financial performances, major changes in the economy, boost in the area of employment and opportunities among masses so that investors gain confidence to invest their businesses in India. But, still, challenges are there. Successful financial communication experts know how to promote financial inclusion. But, for that, it is essential for them to use the technology and greater financial literacy.

Financial PR specialist Andy Berry defines that the Financial PR involves,” dealing with both the financial media and the financial community more widely, such as investment bank analysts. The main focus is on communicating a company’s financial performance to these groups. Working with listed companies involves a lot of what is called calendar work, such as communicating quarterly and annual results. This is very intensive, involving managing media and analyst expectations in the run-up to the formal announcement and helping clients to formulate a positive story around their financial results. The other big area of work is around transactions such as mergers and acquisitions or stock market flotations. This can be very high-profile, working not just with clients but also banks and lawyers.”

Audiences for Financial Communication:-

The key audience for financial communication specialists ate those who have an ability to make the decisions. Broadly, they are:-

Financial Analysts:-

Financial analysts work in banks, pension funds, insurance companies, and other businesses. Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments. Therefore, it is important to have a responsive, regular and open communications.

Individual stockholders:-

Individual stockholders who buy company shares but hold it for better profits. They can be influenced in the following ways:-

  • Giving them importance as primary customers or important customers.
  • Communicating in readable and non-technical language is a must.
  • Learn about stock markets.
  • Welcome new stockholders and express regret when they face losses.
  • Prompt response to stockholder correspondence will give them a sense of belongingness.
  • Develop a newsletter which has a readable content and easy to understand.
  • A company should hold annual meetings and through PR in finance, they need to explain their actions, accomplishments, and improvement in the suggestions made by their clients in the area of financial related decision.

Financial Advertising:- Financial advertising is done by Financial Institutions, such as Public Ltd. Companies, banks, insurance companies etc. in order to invite public to subscribe to the shares and debentures. These institutions have also to provide project details, details of an issue, closing date etc. in the ads. Agencies like Pressman, Saubhagaya concentrate on financial and public equity issue advertising. The investing public is motivated to invest by suitable body copy, a slogan and a promise of dividends/returns. For example, the advertisements by UTI and ICICI (Financial Institutions).


Oglivy and Mother, a famous PR and advertising firm who has created many advertisements in the field of financial advertising, has listed following 12 points to draft a powerful financial advertising:

  • The most important decision: – how should you position your financial products or services? For e.g. Merill Lynch is positioned as a total financial services center, not as just a stockbroker. It is important for a company to first decide their position before advertisement. They should do thorough research before to take a leap.
  • Build trust:- In financial advertising, it is important to build trust by demonstrating company’s stability, identify a spokesperson and train the person accordingly, honest in their offers, show them the face which is handling their money and don’t be whimsy while doing financial advertising.
  • Offer a unique benefit and advertise it: – American Express is the only brand of traveler’s cheque which guarantees an emergency refund within 24 hours a day. Anywhere in the continental U.S., their advertisement never fails to mention the fact.
  • Simplify your offer: – The above advertisement of UTI banks have simplified their offers which helps an audience to understand their products better.
  • Go on Television: – the visibility of TV is faster than any other source of medium to share the information on any channels of media communication because if offset the diversity of its audience.
  • Find a unique symbol: – a distinctive and memorable visual symbol can give advertisement a hook that will catch prospect’s mind. E.g. The Merill Lynch Bull symbolizes the company’s confidence in the long-term strength of the American economy.
  • Go first class: – Have a good advertisement. The advertisement should not look cheap and shabby as it talks about the brand of an advertisement.
  • Unify your advertising: – Even if a company offers different services to different groups of people, they need to unify it based on common theme toward a consumer cause.
  • Talk in your customer’s language: – Use the language which your customer understands and avoid jargon.
  • Make sure that people know that you really want their business: – it is important for financial institutions to be sure that they reach to their audience through right communication and be sure that their intention is, to be honest, and need businesses.
  • Make the most of news: – when there are any financially related announcements, be sure that you act fast and it should be hassle-free. It should not have happened that people face problems because of any undue pressure and create a wrong impression about the business.
  • Don’t ‘be afraid of long copy: – Financial commitment is intensely interesting to the person about to make it. Be sure to give your prospects a plenty of information. One of the best coupon advertisement for Merill Lynch contained more than 1,415 words: – “The more you tell, the more you sell.”




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