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Generative artificial intelligence (AI) is taking the world by storm. It’s impacting virtually every industry, from healthcare and education to software development and engineering.

Recently, we talked a bit about whether and when marketers should use generative AI. To recap, while AI cansave time, enhance creativity and give a deeper insight into customer behavior, trends and preferences, it also lacks authenticity, is prone to inaccuracies, and can often do more harm than good.

The bottom line? AI’s usefulness varies wildly from one business to another.

That brings us to a more specific question: Should you consider using generative AI in a heavily regulated industry … like investor services?

Let’s talk about it.

Why Generative AI Is So Appealing

On the surface, generative AI almost seems like magic. With just a couple of prompts, it can help you write a blog, create social media posts, even analyze complex data.

Among other benefits? You can tweak AI to fit your firm’s voice. You can also use it on the back end to analyze the type of content that your current investors enjoy most, and that is most successful in targeting new investors.

Given this ability to speed up timely insights and maintain the constant engagement that clients demand (and deserve), it’s easy to see why some investors services firms might see generative AI as a way to improve their marketing efficiency.

For all its perceived benefits, however, there are a few considerable hitches in AI’s get-along.

Chief among them? Accuracy — or, more specifically, a lack thereof.

AI Is Not Infallible

Inaccurate market data. Misleading claims about investment products. A factual error that a human would have caught but AI couldn’t.

All of these are very real risks that come with using generative AI. And in an industry where accuracy is not just crucial, it’s mandated, even small errors can have disastrous consequences.

Generative AI might be good at delivering fast results, but speed means nothing if the information is incorrect.

Part of the problem is that generative AI works on dated information. Generative AI programs like ChatGPT have “cutoff dates,” meaning they’re not trained on information past that date — often months if not a year or more in the past.

Also problematic is that generative AI notoriously “hallucinates,” which is confidently delivering incorrect answers to queries – and in many cases, they misunderstand or even fabricate the sources they cite. Even the best generative AI programs have hallucination rates of 3% to 5%, which is more than enough opportunity to create inaccurate statements. And that could erode trust with current and prospective clients.

It’s not just about the data, either. Sometimes, the results AI generates won’t align with your existing messaging or tone, leading to a disconnect that your audience will notice and (rightly) attribute to AI usage.

AI Can Cause Compliance Issues

AI-caused inaccuracies don’t just make you look unprofessional and jeopardize trust with your audience — they can also get you in regulatory hot water.

The use of AI by investor relations personnel increases compliance risk related to the following prohibitions of U.S. securities laws: Companies and their employees cannot make any untrue statement of material fact or omit a material fact about the company in connection with the purchase or sale of the company’s securities. Publicly traded companies cannot selectively disclose material non-public information about the company to certain third parties without sharing that information broadly with the investing public (“Regulation Fair Disclosure” or “Reg FD”).

U.S. securities laws dictate strict rules and regulations about what can and can’t be said in investor communications and marketing efforts. Your content is legally required to be clear, fair and not misleading. Consider SEC Rule 10b-5, which prohibits making “any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.”

It doesn’t matter whether generative AI created inaccurate materials — if you sign off on them, you’re ultimately responsible. ChatGPT won’t serve your time or pay your fines.

So you have to ask yourself: Are the time and effort savings worth the potential reputational damage and regulatory ramifications?

The Final Word

When used responsibly, generative AI can be a powerful tool for marketers. But in investor services, the consequences for missteps are severe. If you choose to use gen AI, proceed with caution — and make sure you have at least one set of human eyes look over anything the technology spits out!

Are you looking for real-world, human-centric marketing solutions for your investor services firm? Mischa Communications has the experience to help and the accolades to prove it. Let’s talk business.

What’s better than getting people to invest in your company? Getting the right kinds of investors to help capitalize your company.

Enter investor targeting.

Investor targeting helps companies attract investors who are interested in supporting their growth over the long term. Through investor profiling, market research, networking and strategic communication, companies can find people whose investment goals line up with their own. And importantly, targeting helps you identify potential shareholders who might be more willing to invest not just when capital is flowing loosely, but during periods of volatility and uncertainty when capital is hard to come by.

Here’s what you need to know about investor targeting.

The Basics of Investor Targeting

Investor targeting starts with good, old-fashioned detective work (aka investor profiling). This involves learning everything you can about potential investors, including areas such as risk tolerance, investment philosophy, financial interests, etc. Remember: You don’t just want to find potential shareholders that would be attracted to you — you want to find potential shareholders that would be attractive to you.

Once you have this information, you progress to market research. What type of investments do your target investors typically prefer? How do they make their decisions? The more you understand the investors you’re targeting, the easier it will be to construct messaging that will attract them.

Next, you need to start building relationships with the people behind the profiles. Networking with potential investors gives your company a chance to share your story, position yourself as an industry expert and demonstrate your commitment to growth and success.

Consider hosting webinars, Q&A sessions or other events (virtual or in-person) to introduce your company to the investors you’re targeting.

Communicating With Investors

Strategic communication is one of the most important parts of investor targeting. You already know a lot about your investors, but what do they know about you? This stage starts with everyone laying their cards on the table and showing their hands.

When you send clear and convincing messages, you’re able to do more than just show the financials. You can welcome investors into a partnership where everyone has a stake in your company’s strategy and vision.

It’s important to keep your messaging consistent, regardless of whether you’re releasing news, speaking to investors in a meeting or sharing information on your socials. This helps build trust, which is necessary to attract and retain investors.

While technology can help you stay in touch with investors, personal connections are still vital. It’s OK to use your website, social media pages or emails to communicate information, but the occasional face-to-face meeting or direct conversation goes a long way toward relationship building.

Investor targeting works best when it’s part of a bigger plan. It’s not something that can be done once and forgotten about — it should be an ongoing effort. The financial world is always changing, so you’ll need to regularly review and update your approach for you to keep seeing results.

Are You Ready to Find Your Ideal Investors?

Investor targeting takes plenty of planning and effort, but it’s worth it. When you focus on the right investors, build strong relationships and communicate clearly, you’ll attract investments from the people who will help your company succeed!

Are you looking to develop a marketing partnership with an agency who has your best interests at heart? Mischa Communications wants to hear from you! Let’s find a time to talk.