Back in 2011, AON Risk Solutions published an insightful article on surviving unexpected catastrophes, called “Keys to Success in Managing a Black Swan Event.” The article is instructive for organizations, including wealth and asset management firms, looking for guidance in crafting their communications and client outreach programs through the current COVID-19 pandemic.
First, what not to do
It is important to understand the psychological effect a Black Swan event can have, namely shock, fear, panic, disbelief, denial, anger and ultimately, grief. According to the article, companies that struggle to survive in such circumstances exhibit one or more of the following reactions:
1. Failure to acknowledge the event, stick their head in the sand and hope it goes away
2. Spend time denying responsibility for it
3. Look for someone else to blame for it
4. Become paralyzed by disbelief and indecision
5. Act too slowly to find a solution or try only one solution at a time – maintain too narrow a focus, thereby missing obvious options that might be more readily available
For wealth and asset managers dealing with concerned clients, these reactions can lead to fewer communications and/or erratic, confusing and unsatisfying communications that do more damage than good to an already stressed client relationship.
Next, what to do
1. Take emotion out of the equation. Focus on accurate, factual and objective data
2. Break down the situation into manageable pieces and clearly outline the tactical response
3. Own the responsibility for the choices made and the actions taken
4. Be confident that a solution will be found
5. Be persistent and do not give up
Evidencing these steps through client outreach provides reassurance to fearful clients instilling much needed calm and a sense of confidence in the firm’s leadership. Objectivity, clarity and command of the data surrounding and explaining an event, reinforce clients’ belief that the firm is honest, fair- minded, realistic and understands the situation to the extent possible. The client does not have to be concerned that they are being misled by too rosy or too dire a scenario. Finally, the client can take comfort that all options are being weighed and the best decision will be made given the circumstance.
Communications are an important component of client relations for wealth and asset managers even in the best of times. But during periods of extreme stress, the right communications can save, and even enhance a business, that may otherwise suffer significant damage.