Spring 2009

Responding to Historic Actions in the Financial Markets

ICMA-RC case study
Daniel Moreau

The economic downturn that began in September was a tsunami that grew rapidly in successively greater waves and challenged the efforts of every financial services institution in the U.S. ICMA-RC reacted to the situation by developing messages that addressed the concerns of our client plan sponsors and their participants. The following are valuable messages that can be used as you work with employees to effectively deal with what was at first an unusual, then unprecedented and eventually historic financial situation:

• Consistency is critical - base all messages, tools and materials on your organization’s financial markets communication strategy; revise that strategy to reflect changing market conditions.
• Remind investors of the core investing principles and promote resources you have to educate and inform them in a time of market volatility.
• Provide information regarding the market and its impact on investors in a straightforward and complete message to retain credibility in a time of market uncertainty.
• Keep your messages timely by developing crisis-mode editorial, leadership, compliance and legal review processes that are responsive to very short deadlines.

A Focused Audience Approach

As part of our Financial Markets Communications strategy, ICMA-RC targeted audiences to actively address the ongoing market situation. From September through the end of the year there were daily meetings where we formulated policy and response that we then we communicated to the following audiences:

Plan Sponsors – Employers were provided detailed information on participant responses to the market, combined with information on our resources available to help ease employee concerns. We also provided explanation and analysis of news events that impacted our investments, such as the federal takeover of Fannie Mae and Freddie Mac.

Participants – For those with accounts at ICMA-RC, our message focused on the need for investors to make choices based on their personal situation and saving’s goals. ICMA-RC’s messages reinforced the personal nature of retirement investing and reiterated the financial soundness of ICMA-RC.

Messages were differentiated based on:

Actively-Engaged Investors – Participants who were actively managing their accounts during the time were provided information at every touch, or contact, point. Messages were posted where participants would see their accounts. We adjusted the level and amount of information as the situation unfolded.

Investors with a Long-Term Horizon – Outreach was limited so as not to raise concerns, but the message that investing is for the long-term was reinforced. Using fact sheets detailing earlier bear markets, we emphasized that timing the market typically does not make sense for long-term investors.

Participants Near or In Retirement – This group received targeted communication and personal interaction about the resources available to them, with a focus on financial planning. Messages emphasized the personal nature of investing and communicated that ICMA-RC had tools and services available to assist participants in their investing strategies.

Associates – ICMA-RC’s local Retirement Plan Specialists, CERTIFIED FINANCIAL PLANNER™ professionals, Investor Service Representatives and associates who work with clients were given consistent messages and tools to address questions about the financial markets. All messages, tools and materials were based on ICMA-RC’s overall Financial Markets Communication strategy.

Strategic Communications Categories

Once the appropriate audiences were defined, ICMA-RC identified the following high level communication categories:

CEO Communications – Communications from ICMA-RC’s CEO Joan McCallen reminded clients of the core concepts of retirement investing and promoted the resources available. Ms. McCallen issued a series of statements on the markets’ impact and reassured clients the company was on sound financial footing. The statements were posted on the Website, and mailed with statements.

Ms. McCallen also actively communicated with ICMA-RC associates to apprise them of the market’s impact.

Reference & Investment Communications – ICMA-RC clients were looking for information. Reference communications provided information on the market in a straightforward manner. More active clients were given more detailed information. We monitored other financial companies and relevant associations and think tanks to measure their response to the market situation and used the information to supplement our own efforts.

Online Resources – Several of our Website channels were redesigned to better communicate information. We added Q&As with senior financial leadership that outlined the strategies of our investments, the content of portfolios, and steps ICMA-RC was taking to respond to the markets’ impact on these funds.

Audience Specific Communications – When it became clear that market volatility would not be short term, ICMA-RC began communicating with participants groups and plan sponsors to reinforce core investing principles and that ICMA-RC would continue to monitor and report on the market. Our efforts included on line messages and inserts in quarterly participant statements.

Looking ahead, we know many investors will continue to be concerned about their retirement security until the financial crisis is well behind us. ICMA-RC understands that it is more important than ever to communicate with participants and their employers in a responsive and strategic manner.