Dealing with Financial Panic

The week certainly started on a shaky note for the economy, with sharp drops in the stock market. The GOP even took the opportunity to call it the KamalaCrash. Everyone thought this might be the big signal of a financial slump, officially ushering in a recession.

However, the markets chugged along with gains and losses, like the Little Engine that Could, and seemed to end the week in a better place, avoiding economists’ fears. According to MarketWatch, the markets are back on the up-and-up. Thursday ended with the S&P 500’s biggest percentage gain since 2022, and the Dow Jones had its best day in three weeks.

These times of market instability can cause panic for many savers and investors. So financial institutions, brokerage firms and really any company with a public offering need to maintain a close line of communication with customers and stakeholders to assuage any fears, explain scenarios and guide them in the right direction.

Communication takeaways: Consistent communication during downturns can go a long way to continue to instill trust in an organization or brand.

Richard Dukas, Chairman and CEO of Dukas Linden Public Relations (DLPR), says if wealth and asset managers aren’t proactively communicating with their clients, it leaves a void and clients can start to question how confident their managers are about their strategies. However, he notes, it’s important to not overreact.

“Those managers who have reminded their clients to stick to a long-term plan based on their goals don’t necessarily need to over-communicate,” he says. “With that in mind, given the markets’ drop, geo-political events, and volatility and unease surrounding U.S. elections, managers would be well-served to develop and implement proactive comms plans for the weeks and months ahead.”

Dukas provided a five-point plan for how firms should work with their agents to establish a communications process for clients during times of extreme volatility, where consistency and a quick response is important.

• Identify the key decision makers required to align on in the response
• Create a review and approval process
• Draft general standby statements that can be adapted accordingly
• Create a plan to disseminate the responses internally so that everyone is on the same page on how to speak to the issue(s)
• Strategize and decide how the response will be shared with key external audiences and who is responsible.