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Investment Firms Are Hurting Investor Confidence

by Lee

Today, Ignites had the results of a poll that asked readers "What has hurt investor confidence most?" The top answers were "rising unemployment/weak economy" (53%) and "dismal markets/reading 401(k) statements" (34%). While those are certainly real factors contributing to diminished confidence levels, I think that the Ignites poll missed a key factor in poor investor confidence: the lack of effective, proactive messaging from product manufacturers and distributors.

As an example, look at nearly any company's investor Web site: Fidelity, John Hancock Funds, Pacific Life, Vanguard, etc... (I don't mean to pick on these firms -- I could have chosen from dozens of companies).

While all of these firms provide in-depth information for investors about the firm and its products, as well as valuable educational information and even insightful market commentary, none of them have tailored their messaging to prominently address the questions that are foremost on investors' minds -- What is going on in the markets? Is my money safe? Am I doing the right thing?

Investors are shaken and most firms are putting their heads in the sand like a scared ostrich or allowing too many simultaneous messages to dilute a key point. This is not a time to hide or to mince words -- it is a time to clearly and forcefully state why investors should trust your organization with their money. Look to firms like BlackRock, MFS, and Putnam for examples of proactive messaging aimed to restore investor confidence. Get out there and communicate your story!