Participation of individual investors in shareholder bases of publicly traded companies

In recent years, the Brazilian capital market has changed significantly with the growth in participation of individual investors. This phenomenon reflects a broader democratization of investments, amplified by factors such as falling interest rates and enhanced financial education. Fintechs and investment platforms have facilitated access to the stock market, enabling more individual investors to diversify their portfolios, including investments in equity, real estate funds (FIIs), and other financial products.

For Investor Relations (IR) professionals, the increase in the number of individual investors brings new challenges and opportunities. Adapting companies’ communication and transparency strategies to this new investor profile is key for the success of their activities in the market and MZ, who is committed to empowering IR professionals by offering cutting-edge technology, exceptional customer service, and disseminating relevant content such as this, brings information related to this growth released by B3 (B3: B3SA3) and the Brazilian Securities and Exchange Commission (CVM) in a recent study carried out by MZ based on information from companies’ Reference Forms.

The Growth and Diversification of Individual Investors

MZ’s study, which analyzes the evolution in individual investor participation in the shareholder base of companies registered with the CVM and traded on B3, shows a continuous and significant growth in the number of individual investors in companies’ shareholder bases. Between 2022 and 2023, the number of investors increased by 5.2%. Between 2023 and 2024, this growth was 1.6%. This increase reflects the market’s democratization, as digital platforms have facilitated small investors’ access to a broader array of financial products. This includes not only shares but also less familiar instruments such as FIIs, ETFs, BDRs, and fixed income products such as Tesouro Direto.

The study made by B3, which focuses on the profile of individual investors on the stock exchange, observed that over 5 million individual investors were active on B3 in 2024. This number is lower than MZ’s study, which analyzes the investor base directly in companies, and the difference is because an investor can own shares in several companies simultaneously, generating a greater number of investors than reported in the B3 study.

The Impact of Investment Democratization on Investor Relations Professionals

The increasing diversification of the investor base and the higher number of individual investors in the stock market introduce new challenges for IR professionals. To deal with this broader audience, companies need to adapt their communication strategies to increase transparency, disseminate information quicklier and create better channels to directly interact with investors.

Among these, the need for transparency becomes particularly more relevant. Companies must ensure information is accessible and easily understood by investors with normally less investing experience than large institutional investors.

According to the B3 Study, the change in investor profile also brings new behaviors: investors are more likely to diversify their portfolios, and data from 2024 indicate that nearly 39% of individual investors have more than five different assets in their portfolio, that is, investors will want increasingly additional information on more companies. This phenomenon requires companies to adjust their messages so they can address investors with different levels of sophistication, ensuring everyone can follow and understand the information disclosed. 

Communication and Engagement Tools for IR

To meet this new investor profile, IR professionals need to adopt their good practices, beyond what is required by traditional compliance standards. In first place, companies should focus their efforts on continually improving financial communications to keep investors well-informed and engaged. This involves not just complying with legal obligations, such as the disclosure of financial statements, but also having transparency in strategic and operational information. Companies must provide precise and accessible information through periodic reports, presentations and even webinars, offering a detailed and interactive view of the company’s performance.

Furthermore, to capture the attention of a younger and more diverse investor base, the use of social media and other digital platforms has become increasingly relevant. These dynamic channels allow companies to promote direct and tailored communication, also enabling them to elaborate educational content, such as explanatory videos, informative posts and FAQs, which help reduce the gap between investors and the company.

Technology has proven an indispensable ally in this process, with innovative tools that automate the disclosure of results, facilitate investor interaction, and offer real-time data to optimize communication. Digital platforms also allow companies to monitor public perception and quickly adjust their communication strategies, which is key for maintaining trust and engagement with an increasingly demanding investor base.

Challenges and Opportunities for IR Professionals

The growing individual investor base brings an additional challenge: understanding the different preferences and behaviors of each investor segment. With the diversification of portfolio and increasingly segmented audiences, IR professionals must be able to customize their communication and engagement strategies to meet the expectations and needs of each group. This means not only identifying the preferences of individual investors in terms of the content and format of the information but also adapting how companies communicate with investors from different sectors and different levels of market experience.

For instance, technology sector investors might prefer a more analytical and detailed approach, whereas those in traditional sectors like agribusiness or real estate may prefer practical communication focused on tangible results. For IR professionals, this implies an ongoing effort to map and understand the specific characteristics of each investor group and shape their approaches accordingly.

Another important factor to consider is the growing presence of women in the stock market, representing 26% of investors in 2024. This data indicates a significant change in investor profile, requiring companies to take a more inclusive and diversified approach. Communication strategies can no longer be one-dimensional or aimed at a predominantly male audience.

Companies and IR professionals need to be aware of the particularities of this new audience, such as content preferences, communication channels and even risk perception and the values that guide their investment decisions. Therefore, it is crucial to adopt communication practices that recognize this diversity, using inclusive language, addressing issues that attract women investors and creating engagement spaces in which all investor profiles can participate, regardless of gender, age or level of experience in the financial market. This not only strengthens the relationship with the investor base but also reflects the company’s commitment to equity and inclusion, which are increasingly valued by today’s audience.

Conclusion

The growth in participation of individual investors in the Brazilian capital market has brought significant and transformative impacts on Investor Relations practices. This movement not only expanded the investor base but also brought new challenges and opportunities for IR professionals. To address this new reality, IR professionals need to expand their communication strategies, adapting them to a more diverse audience, with different levels of experience, expectations and needs. This requires a recurring commitment to transparency so that all relevant information is accessible in a clear and efficient way. Furthermore, the need for engagement goes beyond just providing financial data; investors are now seeking more direct and personalized interaction with the companies they invest in, in which they expect higher levels of proximity and relationship.

The use of new communication tools, such as digital platforms, webinars and social media networks, becomes essential for connecting with a younger and more dynamic investor base, who demands information in real time and through more accessible and interactive formats. This shift also requires companies to rethink engagement, going beyond traditional financial reports to incorporating content that directly addresses investor interests and values, such as sustainability, governance, and social responsibility.

In this scenario, IR professionals play a crucial role in facilitating the democratization of the investment market. They are responsible for building essential bridges between companies and new investors, ensuring public expectations are met ethically, efficiently, and transparently. IR professionals play a crucial role in fostering healthy, enduring relationships with investors. This, in turn, strengthens the company’s reputation and contributes significantly to the stability and expansion of the capital market. Therefore, adapting to new market demands is not merely an operational necessity; it’s a fundamental strategy for ensuring corporate sustainability and success in today’s financial environment, which is characterized by an increasingly engaged and informed investor base.

We hope to have helped with this information and insights into the Studies on Individual Investors from both B3 and MZ, and we are here, always at your service!

External Communications and MZ Research Team

About MZ

MZ (www.mzgroup.com.br) is the largest and leading independent global player in investor relations (IR) solutions.

Founded in 1999, the Company has surpassed the mark of 2,000 websites published, currently serving over 800 companies and investment management firms listed on 12 stock exchanges.

To empower IR strategies, MZ delivers innovative technologies and exceptional customer service, ensuring long-term partnerships.