How Should Financial Services Companies Market Themselves During A Volatile Stock Market?

There is nothing that drives volatility in the market more than uncertainty. The unknowns that surround the Coronavirus, the potential of an oil war between OPEC and Russia and an overall feeling that the bull market might have run its course, are making investors feel nervous and that, of course, influences how they invest. We experienced this type of volatility back in 2008 and we have not only guided Financial Services clients through it but shown them how they can benefit during these times. We believe that financial services clients should communicate with their clients, whether it be FAs, RIAs, Institutional Investors or Individual Investors, that in spite of the hourly ups and downs of the market, there are strategic investment solutions available to them. In short, investors want to know during volatile market swings that they have options and that someone has their back.

During the financial crisis of 2008, we worked with a large sector-based ETF fund to develop a strategy that addressed the market conditions head-on and let FAs know that they had many investment strategies available to them to help their clients cope with the ups and downs of the market. These particular sector ETF funds could help them mitigate risk by giving investors exposure to entire sectors rather than an individual stock, keeping them diversified. In volatile markets, it is important to communicate strength. The large AUM of the fund was highlighted more than usual along with the very high trading volumes (90 million shares per day back in 2008) to reassure investors of the valuable liquidity of this type of investment. The results of this strategy were that the funds gained AUM over this period and it is now one of the largest Sector Funds in the world with AUM of around $140 Billion.

So heed the advice you might give to an investor. Stay the course. Don't panic. Be strategic. Take a long term view, but be able to react in the short term. Be optimistic and opportunistic.

The key takeaways are:

• It’s important to make sure that your messaging is matching the moment and speaking to investors' concerns.

• There is a messaging strategy that can ease some of the anxiety that investors are experiencing.

• It is important to communicate during this time, rather than pull back into your shell and have to work twice as hard to build brand recognition in a crowded market when the bullish cycle returns.

• Be open to doing things differently and consult with partners who understand the complexities of marketing financial products and can give you objective and executable advice.

• Make sure you have an agency partner who can be nimble and quick to respond to changing market conditions in real-time.