More Money for IR Outsourcing

More Money for IR Outsourcing


A growing number of companies are increasing spending on external service providers in their IR budgets. This is the conclusion of IR Magazine’s Global Practice Report 2023, for which 340 of those responsible for this from IR departments of companies worldwide were surveyed. According to the report, external agencies and specialists account for 34% of annual budgets. A year earlier, the average value was only 28%.




Out of a total of 13 different work areas, six fields emerge as focal points. 77% of all companies surveyed outsource shareholder registration, followed by shareholder identification (64%), design for annual reports (58%), contacts with voting representatives (51%), management of the IR website (49%) and perception studies (47%). What is striking about this is that there have been no changes to these top 6 since the study was first carried out in 2018.


Over the last five years, a fall from 28% to 22% in the proportion of companies that leave the organisation of road shows, meetings and events to external specialists can also be observed. The same negative trend, from 27% to 24%, can be seen in investor targeting. On the other hand, only 3% of the companies surveyed include external consultants in their IR strategy. Companies prefer to manage the entire complex of corporate communications internally: a full 15% of the IR representatives surveyed involve external personnel in their work.


In contrast, external IR consultants score points in two technological fields that are becoming increasingly important for investor relations. In social media monitoring, the proportion of companies using external expertise increased from 24% to 30%, and, in the setting up of IR apps, from 28% to 32%. This development is also an indication that employees in IR departments often do not see themselves as sufficiently competent to achieve the best output for their own work in the case of digital communication channels.


The results of the study also clearly show that most external IR budgets are used for administrative tasks that are outsourced due to the large amount of time required. In addition to cost reasons, companies also rely on external service providers for organisational reasons. Webcasts and conference call services are among the basic services that are outsourced. Strategic issues and digital communication channels, on the other hand, are at the top of the agenda should more financial resources be available in the future. 33% of respondents would then commission perception studies, 30% more in social media monitoring and IR apps, as well as 29% more in investor targeting.


Interestingly, the size of a company does not play a role in this prioritisation. In general, however, larger companies are more willing to have perception studies carried out. 25% of low-capitalised companies rely on external IR service providers to realise roadshows. In the case of large caps, it is a whole 7%. A loss of importance of the role of brokers in events such as road shows can be observed. “When we started IR work more than seven years ago, we still had brokers who, after conferences, obtained feedback from investors on our appointments and presentations,” explains Irina Zhurba, Head IR at Mister Spex, a small cap from Berlin. For their own work duties, this means that an additional effort is required after investor events, since feedback on such events is an important input for the presentation of the equity story.


What criteria do IR teams use to recruit their external partners? With 56%, the reputation of specialists is by far the most important factor. For 88% of companies, it is one of the top three selection criteria. Cost efficiency is ranked first by a further 21%. Two other top criteria are compliance with the company’s own policy and a track record in the market for IR and financial communication.

The board of directors is responsible for the planning of the external IR budget. In larger companies and international groups, the IR department reports directly to the CFO. It’s a different story for small caps. Here, the reporting line – including budget planning for external IR service providers – goes directly to the CEO.

When cooperating with external IR partners, smaller companies are faced with a greater balancing act than large or mid-caps. They must shoulder the routine tasks in IR work such as websites and the organization of general meetings, as well as face the challenge of opening up new investor groups as part of IR marketing. Here external IR agencies bring to the table the advantage of having contacts to various target groups; these target groups range from special funds to asset managers and family offices.