'Don't be frightened, we're not all anoraks'

'Show your face. If you are proud of your products or services don't be afraid to let people know'
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The Independent Online

Tuesday. I am not in Leeds and I am not talking to a group of industry captains in an attempt to help them understand and appreciate the private investor. My friend and colleague Jeremy King has leapt into the breach at the last moment and is talking to the businessmen, while I adopt a recumbent posture on the office floor.

Tuesday. I am not in Leeds and I am not talking to a group of industry captains in an attempt to help them understand and appreciate the private investor. My friend and colleague Jeremy King has leapt into the breach at the last moment and is talking to the businessmen, while I adopt a recumbent posture on the office floor.

I am a martyr to a bad back. Fellow sufferers will sympathise as I relate those occasions when I have been on my hands and knees at the bottom of the stairs, whimpering as I contemplate the journey to bed. Or when, naked, I hung by my fingertips from a beam while two nurses swaddled me in plaster of Paris bandage from neck to nether region.

This time the collapse came when I was hefting a bag of salt to the water softener. I felt the telltale twang and knew the week would be a write-off as far as appointments were concerned. A trip to Leeds was definitely out of the question.

I'm comforted by the fact that Jeremy will do an excellent job because he gives this type of talk on more occasions than I do. At the invitation of the London Stock Exchange, we are taking part in seminars held at various locations around the country and targeted at local businesses. Specifically, we discuss the ways in which the private investor uses the internet for research, but the underlying purpose is to bridge the gap between the companies and investing individuals.

A gulf, a huge chasm, exists between us. What evidence do I have? A detailed survey conducted among all the 2,000 SQCs (Smaller Quoted Companies) on the London Stock Exchange asked the question: "Do you make any special arrangements to communicate with your private investors?" Almost two-thirds of those who responded replied with an emphatic, "No".

This, despite the fact that there's a growing tendency among the big financial institutions to ignore the SQCs in favour of the supposedly safe FTSE 100 sector. This has resulted in a liquidity problem for smaller companies, which could be partially solved if the private investors piled in.

So why don't the companies want our money? The answer is that generally they do (when asked whether they would consider making the effort to attract us a majority of companies said they would). It is simply that they don't know exactly how to go about it and are worried that they will be throwing a bundle of money at the task without any great hope of success. Hence our hike around Britain showing the companies what an investor looks like and what we really want from them.

And what do we want? I won't bore you with the detail but here is a broad outline of how companies should woo the private investor:

Show your face. If you are proud of your products or services don't be afraid to let us see who you are and what you do. Start to communicate with us and use all the sophisticated methods that are available - newspapers, magazines, the internet, telephone, exhibitions, face-to-face briefings.

Appoint an investor relations professional. Communication is invaluable if it is done properly and professionally. Sadly, many companies leave it to incompetent members of staff who tag the job on to the end of a dozen-and-one other things they have to do. Alternatively, an outside consultancy is employed which gives you half-a-week's work for three times the cost of a full-time employee. My advice: take an experienced communicator on to the staff. Make him or her an integral part of your management team, able to buy in specialist help if necessary.

Talk to the Press. Contrary to what you may believe, the financial journalists in Britain are among the best in the world. They want to present company facts in an informed and unbiased way, but they are only able to do so with your co-operation. So when a journalist rings up and wants facts about your business make sure they are given quickly and accurately. And if he or she wants an opinion or comment from the company it should come directly from the chief executive or another member of the senior management team, not a once-removed PR company.

Get yourself a good interactive website. A couple of weeks ago, a survey was published showing that in a year the proportion of investors using the internet for share information had risen from 23 per cent to 74 per cent. However, the number of people who visited specific company sites was much smaller and that is because the majority of company sites are second rate. As a generalisation they are poorly designed, difficult to navigate and out of date. Take a look at the general financial information sites and model your company site on them. They are user-friendly and investors know how to find their way around them. And for goodness sake, keep the information on your site up-to-date. Stale information means a stale company.

Don't treat us like second class citizens. The private investor believes, with some justification, that City analysts get to know facts about your company first. Apart from being against the law, this is a shortsighted and unfair policy. Release all the details of your analyst briefings to the Press, and post the facts on your website, simultaneously. Apart from anything else, you have a duty to your shareholders to do this.

Don't be frightened of us. Granted there are a few anoraks who make themselves look silly at the annual meeting by asking obscure questions. (They are easily identified because they usually preface their comments by saying: "As a fully-qualified chartered accountant myself.") However, the majority of us are ordinary folk who want to entrust our savings to you in the hope that you will prosper because then we shall too. If you are honest with us we will be understanding with you, I promise.

* Wednesday. MY enforced sojourn on the office floor brings with it certain compensations. Immobility gives me a chance to read and this morning I have been dipping into a newly-published book, The Super Analysts. It's billed as "conversations with the world's leading stock market investors and analysts" and is compiled by Andrew Leeming.

Mr Leeming is a very big wheel in international banking and currently heads Asia's number one banking team for ING Barings. I am assured by a friend who works in this rarefied sector that while the names of the people he has interviewed for his book don't mean much to the likes of you and me, they read like a Who's Who in the world of professional analysts and fund managers.

Do not be put off by that. This book is an easy and quite fascinating read. Mr Leeming uses a question and answer technique for his presentation and I was impressed by the absence of jargon.

There's an insight into the minds and methods of these men and women who buy and sell billions of pounds worth of stock, often on a daily basis. Each person explains their investment approach in detail and, while the techniques vary, it's comforting to note that they invariably rely on such factors as patience, timing and, above all, common sense.

At £19.50 for 420 pages I reckon this book is good value for the serious investor. It is published by Wiley and should be in a bookshop near you now.

* I have just received the following e-mail from a Francis Palmer: In your article in The Independent on Saturday you said: "Not so easy to divert are the unsolicited telephone calls......."

They are very easy to stop! Under the Telecommunications (Data Protection & Privacy) Regulations 1999 it is unlawful to make a direct marketing call to individuals who have registered their number with the Telephone Preference Service.

To do this you write to Telephone Preference Service, 5th Floor, Haymarket House, 1 Oxenden St, London SW1Y 4EE. Alternatively, telephone 0207-1766-4420, fax 0207-1766-1886 or e-mail tps@dma.org.uk.

We have done this. For a short while some calls still came and in each case we chatted up the caller long enough to discover as much information about them as we could and reported it. The TPS followed it up promptly. It is many months now since we have had such a call. Your readers might like to know this.

* terry.bond@hemscott.net

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