Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

As the financial industry works its way through the fourth quarter, holding its collective breath that no more major corporate casualties will occur, the future of many wirehouse-based wealth management businesses is still uncertain. Client discontentment runs broad and deep, and firms will face difficulty repairing their reputations quickly. Case in point: Morgan Stanley’s most recent quarterly results showed that clients withdrew a massive $46 billion from money-market accounts in September.

According to a recent report by Brand Finance, a global consultancy, the financial crisis wiped out $40 billion in the value of top financial services brands in the month of September alone. The demise of Lehman Brothers, Bear Stearns and Merrill Lynch have left the wirehouses, and their customers, seriously concerned that without a new approach to their businesses they could face extinction.

Firms with tarnished brands such as Lehman Brothers, Bear Stearns, UBS and others have experienced the largest outflows of clients’ assets, proof positive that brand reputation matters and negative publicity is damaging to the business. For firms who have maintained good reputations, this is a golden opportunity to proactively promote their track records with clients. Charles Schwab, for example, recently posted a notice to all clients on their website letting them know the firm is financially sound and that client portfolios were held safely and separately.

Display article as PDF for printing.

Would you like to send this article to a friend?