Capital Markets Corporate

August 9, 2019

Our Weekly Newsletter


Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.

Comic relief
Humour might play a bigger role in public earnings conference calls than previously thought. Analysis shows that experienced analysts, as well as those with positive views of the company, are more likely to use humour on conference calls, and more likely to be allowed to speak for longer and receive longer responses from managers. The research also indicates that when managers use humour, analysts’ stock recommendation revisions following the call are more positive. With AI on the rise, could losing this vital element of human interaction turn stock recommendations tougher? (From Bloomberg, 5 August 2019)

Pennies on pause
The Royal Mint produced no 1p or 2p coins last year for the first time in decades, as cash payments swiftly fall out of favour. A Treasury spokesperson insisted the pause on pennies was because there are already enough in circulation. Though the Treasury has previously noted it makes no economic sense to produce coins used infrequently, there are said to be no current plans to axe small change. About 2.2 million people in the UK are estimated to be almost entirely reliant on cash on a daily basis, with the elderly and vulnerable consumers most likely to fall into this group. (From The Guardian, 7 August 2019)

Record numbers pay no income tax
New analysis from the Institute of Fiscal Studies (IFS) reveals record numbers of adults (43%, up from 38% in 2010) are paying no income tax. Meanwhile, the top 1% of earners are increasingly facing this burden and contributing 27% of the country’s income tax. IFS experts warn that relying disproportionately on such a small group is risky due to potential policy changes that could threaten them and have a disproportionate effect on tax and public spending. (From The Telegraph, 6 August 2019)

Private equity investment slump
A study has shown that private equity investment in the UK has fallen to its lowest level in over five years. This is due to ongoing economic and geopolitical uncertainty making vendors more cautious. However, the research also indicated that the total value of these deals increased, bucking the downwards trends seen elsewhere in the market. Commentators suggest investors are increasingly focusing on higher quality opportunities that are seen as safer bets. (From City AM, 5 August 2019)

Pension fraud risk
The Financial Conduct Authority (FCA) and The Pensions Regulator have found almost half (42%) of pensioners are vulnerable to common pension fraud ploys, equating to roughly five million savers. Tactics used include cold calls, ‘free’ pension reviews, claims of guaranteed high returns, time-limited offers and early access to cash before the age of 55. Worryingly, those who describe themselves as financially savvy were just as likely to fall for these scams as anyone else. (From Financial Times, 7 August 2019)

Using media consumption data to reach key audiences

With media watchdog Ofcom recently publishing two reports into how the UK consumes media – from more traditional newspaper and broadcast channels to up-and-coming streaming and online services  – now is the perfect time for communications professionals to take stock and ensure their thinking reflects how clients can best reach their key audiences in 2019.

This week saw the launch of Ofcom’s Media Nations Report, designed to look at the impact and take-up of new types of video and audio that people can choose from, and how that affects the UK media landscape.

With streaming services like Netflix and Amazon Prime enjoying a bounty of media attention, there was an expectation they would eclipse more traditional forms of content. However, traditional TV viewing remains most common, meaning the much-valued news or breakfast sofa slot is likely to still hold its importance among communications professionals. That said, viewing behaviour varies drastically according to age group; younger viewers aged 16-24 watch an average of just two minutes of TV news compared to 33 minutes among over 65s. There is also a continuing shift towards online video services, making online video content for channels such as YouTube a key component of a full-scale PR campaign.

Last month’s Ofcom report on news consumption in the UK confirmed that TV channels are slowly declining in popularity for accessing news, though BBC One remains the most popular channel for this. In contrast, social media is a growing channel for news consumption, with half (49%) of people using social media for this purpose, compared to 44% in 2018.

However, trust remains a key factor, with only 37% of people who read news on social media believing this to be an impartial source. This compares to 78% of magazine readers and 58% who get their news from print newspapers. Making sure to place the right content with the right media therefore remains paramount, especially for financial services where trust remains a significant barrier.

The importance of specialist audiences should also not be forgotten – in a sector like financial services, these can often be quite niche and come with different channel requirements than those typically preferred for a broad consumer-focused campaign.

Keeping a keen eye on changing media consumption is more important than ever. Overall, there is a clear need for communications professionals to create content that can still serve more traditional channels (with the media landscape not sufficiently transformed to disregard them) but also tailor campaign material to work in tandem with the progressive shift towards digital.

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