Regarding investment management, we've come up with a new set of fixed-income funds for people taking-or about to take--distributions. We previously used mostly actively managed bond funds. We'll continue to do that for clients who can tolerate more risk. But we picked a portfolio of passively managed, very boring short-duration funds. So we're taking risk on the equity side, not on the fixed-income side. I tell my clients that boring is the new sexy. That's the most significant investment change we made.
On the client management side, one of the things we started doing was to comment to clients about what's going on in the markets. We never did that before because our clients are long-term investors and we teach them not to pay attention to daily gyrations. But we started communicating about market conditions via e-mail, in addition to our monthly newsletter.
One of the big drivers of everyone's anxieties was constant breathless commentary on how the sky was falling. Instead of telling people what not to watch, we told them about what to watch if they wanted to make sense of everything. One of the things we pointed them to was a podcast called Planet Money (www.npr.org/blogs/money), a combination blog and podcast on NPR that does very in-depth and entertaining segments on financial topics.
We also pointed clients toward something called the Marketplace Whiteboard from American Public Media (http://marketplace.publicradio.org/collections/coll_display.php?coll_id=20216), a series of short videos that describe what's going on in the market, such as what is a credit default swap. We recently recommended www.khanacademy.org/.
We realize that not everyone will find all of these as fascinating as we do, but the more they understand the better because I want well-informed clients who understand why I recommend what I do.
Another new thing we started last year was conference calls. We invited our investment management clients to join a short lunchtime call. The response was great. Even clients who couldn't attend thanked us for having the call and said they felt better just knowing we were doing it.
Roy Ballentine, president of Ballentine, Finn & Co., Wolfeboro, N.H.
We significantly increased the amount of communication we were doing, with the flow of documents we sent out as as e-mail attachments or paper documents roughly doubling. But one of the things we learned is it's not enough just to send materials and assume that we've done our job.
What happened was the clients weren't reading the e-mails, or they read it but didn't remember it, or they didn't understand it and didn't let us know. And those things turned out to be very important later. We found out we had to follow up with phone calls and personal meetings to make sure clients really incorporated or understood the main points we were trying to communicate.
The second component of this was internal to our firm. Having never been through something this long, exhaustive or severe, this is the first time we ever encountered any issues relating to the morale and energy level of our professional staff on the front lines dealing with clients every day. Making sure those folks got the proper support and coaching from management, along with time off whenever possible, was really important.
Another thing we didn't anticipate was that reports that formerly were done quarterly were in demand as much as a couple of times per month, so people's workloads shot up. We actually added staff during this period. From a management perspective, even though revenues were decreasing due to market conditions, we found you may need to add staff--and thus, costs--to do the right thing for clients and to maintain the client base during difficult periods.