When Communicating with Clients or Investors, Don’t Pull ‘A Yellen’

Communication is the cornerstone of any relationship. Here are best practices to keep in mind when communicating with clients and investors.

27 June 2016


Last week, Financial Advisor reported that Yellen advised investors not to rely on the Fed for explicit guidance on the next interest rate hike. “Only on rare occasions” will the U.S. Central Bank spell out when it’s going to move. As you can imagine, investors were left perplexed over the rate path.

Yellen’s comment came on the heels of a statement that was issued a few months ago after a rate-setting meeting. She cried wolf, suggesting a hike would happen in April; and a few weeks later, meeting minutes were published that suggested officials wouldn’t make a move until June. The result: a bewildered investor base and a flurry of media attention with headlines like “Janet Yellen probably just signaled two interest rate hikes for this year.”

A lesson learned

The Fed could learn a thing or two from the asset management industry. Now more than ever, financial advisors, private client bankers, investor relations personnel — anyone in a relationship role—recognize the importance of communicating consistently and clearly with their clients and stakeholders. Communication is the cornerstone of any relationship. It can set the tone for your entire organization. If your communication practices aren’t buttoned up, you risk losing credibility and your clients will seek business elsewhere.

Best practices in effective client communication

To eliminate any chance of frustration or confusion, here are best practices to keep in mind when communicating with clients and investors:

  • Make investor information easy to access — rather than using paper mail, which has a slow turnaround time and high printing costs, more companies are leveraging web portals to distribute investor information. This allows clients to access their information 24/7 with a simple login and password.
  • Provide content in formats that engage investors — some new tools being implemented allow investors to sort, filter and search for information so that they can more easily download and analyze financial information.
  • Create a consistent client experience — think of it in terms of a customer journey (from the initial moment of consideration to the transition to the next experience). Brand consistency across your communications contributes to increased customer awareness and loyalty.

Stay tuned for upcoming rate-setting meetings and the post-meeting communications. I am interested to see if the Fed’s messaging improves.

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