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When McDonald's announced its phased elimination of plastic straws earlier last June, it also generated front-page coverage around the power of environmentally minded retail proxy voters. Such investors hold approximately one-third of U.S. stocks. As highly publicized as the vote was, the fact is the vast majority of retail shareholders don’t exercise their voting rights. Retail shareholders vote just under 30 percent of their shares, and they hold approximately one-third of U.S. stocks. Many reasons contribute to low turnout, including competing priorities and unfamiliarity with the issues.
For broker-dealers and financial advisors, the consequences of missing opportunities to communicate with their shareholders sends a message, too: Engaging with and educating clients aren’t top priorities. Shareholders who favor a greater level of digital customer services have a choice: accept the relationship as is or become influenced by the electronic drumbeat from alternate resources.
Growth-minded broker-dealers shouldn’t let lackluster turnouts set the stage for missed opportunities. After all, these retail stalwarts easily fit the model profile of desirable long-term customers focused on long-term objectives.
As president of Broadridge’s bank broker-dealer business, my team and I tackle the challenges of proxy voting every day. We find that motivating investors is similar to motivating consumers. We must decode the behaviors that draw them to the “moment of truth” – that point where they pivot toward making the decision we want. Take the following examples from my own background:
Whether buying cookies or software – or voting on a proposal – everyone takes or avoids an action based on such moments of truth. In the case of a proxy proposal, broker-dealers are confronted with distracted shareholders who wonder, “Should I read this communication now? Or am I too busy doing other things?” The answers to such questions can lead to meaningful governance or choices by disengaged investors.
Here are four ways to help nudge shareholders toward the moments of truth that inspire the customer loyalty you want while giving them the engagement experience they need:
There are extensive benefits to broker-dealers who implement smarter digital ways to “get out the vote.” In the past year alone, the number of retail shareholders who voted using mobile devices rose 51 percent to over 1.8 million. By adding a better proxy voting user experience to your business goals, you’ll find you can keep pace with your emerging competitors while broadening the type of shareholder engagement that builds greater loyalty to your brand.