Financial public relations

by Terrence Collis

The financial public relations industry is growing in size and role-driven by a demand for corporate transparency and a thirst for information about business. The media’s appetite seems to have no limit. In the UK 10 national daily newspapers and 9 national Sunday papers regularly and increasingly cover business matters. There is also a multitude of satellite, cable and terrestrial television channels, hundreds of radio stations and the result is ever growing coverage of corporate, industrial, business and consumer affairs.

The US does not have comparable national media with the exception of the key financial newspaper, the Wall Street Journal. However, the US does have very sophisticated business coverage on cable television, and a range of financial centers in addition to Wall Street in New York, notably Boston, Chicago and Los Angeles. Europe has not historically had a public market for equities of the same level of intensity as the US and Japan. However, the stock markets in all the major European countries are growing rapidly and drawing closer to the UK and US model.

The financial media in Europe is still dominated to a great extent by the European editions of both the Financial Times, the Wall Street Journal and The Economist. As local markets grow, local media becomes more important as do the European-wide cable and business channels. The economies and stock markets of the Far East and the Pacific Rim are also becoming increasingly important to both companies and investors.

The rules and regulations of the world stock and bond markets, and the complexity of accountancy standards, inevitably make financial public relations a complicated speciality. A few thousand words is not a lot in which to try and explain those complexities. In this article I give a very personal view of the role of financial public relations and the contribution it makes to the companies who use it properly. The emphasis is on the basic communication skills and demonstrates how much financial public relations has in common with the rest of the communications industry.

Comments and examples concentrate chiefly on the UK and London market which is as sophisticated as any in terms of both the equity market and the financial media. Experience shows the same skills approach can be applied elsewhere in the world, even though the rules and regulations may differ considerably.

This article does not examine in any detail areas of specialization within the financial public relations industry, such as privatization or flotation, but concentrates on the basic objectives. New areas for financial public relations specialists to tackle continue to arise. For example, there is a whole new sector developing to advise and support companies in their management of increasingly difficult and controversial annual general meetings.

There is also a significant specialist sector engaged in media relations for personal finance products. This clearly fits within the financial public relations world but as it is sufficiently different and specialist, it would require an article of its own.