Communicating Well During Market Dislocations

Communicating Well During Market Dislocations

When significant market dislocations occur, managers’ communications seem to fall into two camps:

  1. Proactive timely commentaries on the event, with immediate implications and future outlook – with much of the preparation and content development, done in advance by a well-prepared team
  2. Radio silence – with all hands on deck, these managers are busy managing portfolios and responding to client or consultant calls

Pre-Internet, industry leaders mailed written commentaries on significant market events within days, but the pieces could take a week or more to reach everyone. Today, websites, Blogs, webinars, LinkedIn, Twitter and email have all become freeways for instant communications on the day-of and days immediately following an event.

A perfect example? The recent Brexit referendum generated a flood of manager communications almost instantly. On Friday, June 24th, the day after the surprising Brexit vote outcome, global markets crashed, outlooks for even single-digit global economic growth shrank, fears of an impending global recession were surfacing, and uncertainty around what all this meant for the future was high.

The calm in the storm were the commentaries published nearly everywhere by asset managers and consultants. They sought to bring clarity and calm (for the most part), explaining:

  • What is Brexit?
  • What are the implications?
  • Who are the likely beneficiaries?
  • Who is likely to incur the greatest damage?
  • What does this mean for the future?

Almost as the sun rose that Friday morning, Principal posted an 8-minute video of Jim McCaughan, CEO of Principal Global Investors, sharing his perspective on the event. In addition to his CEO role, Jim’s Scottish heritage and long-term global perspectives made him the ideal spokesperson. Simultaneously, Mohamed El-Erian, Chief Economic Advisor at Allianz, posted continuous updates, facts and thoughts. As the day progressed, a number of insightful and some quite detailed written commentaries followed from firms as varied as Payden & Rygel, FIS Group, Allianz and Mercer Consulting.

And again, first thing Monday morning, Principal was out with a new post: “Sixty seconds is all you need for the latest Brexit & global economic news! Download it here:” Tuesday morning, Principal hosted a webinar titled, “Britons Choose, Fed News and Market Views,” where the firm’s Director of Marketing and Thought Leadership moderated a Q&A interview with Jim McCaughan answering the questions top of people’s minds. While many of the news shows, radio and public venues were overwrought, predicting calamity and ruin around the world, leading asset management firms shared their observations, insights and projections with calm, measured updates.

Whenever there is a major shock to the markets, fears mount, and questions are endless and perhaps even unanswerable. People are anxious to know what the likely impact of the event will mean – both immediately and longer term. Leading asset management firms, such as those above, who take a prominent role in providing timely, informative communications regarding significant market dislocations and economic events become the go-to resource for news and updates – for both investors and consultants.

Firms that choose to go radio silent leave clients and consultants wondering whether their investment teams are calm, confident and focused on portfolio performance, or whether they are panicking. Are they buying or selling? Is liquidity an issue? A majority of managers wait to see how the event unfolds and then include their views in their regular monthly or quarterly newsletters and commentaries. Some are quite lengthy, filled with facts, figures, history, charts and alternative outcomes. Some are lightened by cartoons. By the time clients receive this information, however, many consider it old news. Few bother to read lengthy written documents, no matter how comprehensive they are with all the information and perspectives possible.

It is always more relevant and meaningful for a manager to communicate a few highlights that will be insightful to clients than to do nothing at all, or provide too much too late. Brevity and time are of the essence.

Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Christine Røstvold, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Christine was a founding board member of PAICR (Professional Association for Investment Communications Resources), and served on the Advisory Board for more than a decade.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s