Financial Services Companies Increase Customer Service

As returns dry up, investors want financial and psychological support.


When financial services companies aren't delivering returns to investors, customer service becomes essential. In the wake of catastrophic stock market losses for many retirees and retirement savers, companies have been trying to reassure their customers by using every channel of communication they have available.

Here's a look at how some of the financial services giants are responding to client fears:

Answering questions. In addition to fielding record numbers of phone and E-mail queries from clients about investments, some companies are proactively calling, E-mailing, and mailing clients the company's outlook for the future. Vanguard has sent more than a million E-mails to clients, offering its assessment of the current stock market and the company's health in the past month, according to Tim Buckley, head of Vanguard's information technology division. The company has also featured videos of chief economist Joe Davis and CEO Bill McNabb discussing why the company is still strong and trumpeting participation in the U.S. Treasury Department's guarantee program for money market mutual funds. "I believe the economy and our financial markets will recover," asserts McNabb in one eight-minute video designed to reassure skittish investors.

Educating consumers. Most companies are mixing education materials with their psychological reassurances. In a Web page devoted to the market turmoil, T. Rowe Price offers a look at historical stock market performance during and after crisis events and a comparison of stocks versus cash. "I think we all struggle to try to maintain some focus and some long-term perspective and to try not to get too whipped around emotionally by the daily ebbing and flow of financial markets," says Chief Investment Officer Brian Rogers in a seven-minute video clip featured on the website. "You basically want to be a buyer when there's blood in the streets, and over the course of the last 12 or 13 months, there has been an ample amount of blood in the streets." Price's customer marketing group meets daily to develop strategies to respond to customer questions and arm representatives who interface directly with investors with talking points based on the day's news to quell the fears of anxious investors, according to Ann Schultz, group manager for customer development and management. "Some people are hanging in there and feel comfortable, and others are making shifts," she says.

Interacting online. Fidelity launched Web workshops last week offering guidance for 401(k) participants during volatile markets. The webinars are led by registered licensed representatives of the company, typically run between 45 and 75 minutes, and have already been viewed by between 750 and 1,000 people. They can be watched live on the Internet, with time to type in questions, or prerecorded. "We have been overwhelmed with the number of people who have been signing up for the Web seminars," says Michael Doshier, vice president of marketing in Fidelity's workplace investing group. The company plans to offer at least three dozen more workshops over the next two weeks. Fidelity has also seen a 130 percent increase in phone calls from last year and a six- to eightfold increase in Web traffic. All the top 10 days for Web traffic have been in the past month. Consequently, 401(k) transactions have increased in the past month, Doshier says, but more than 90 percent of Fidelity's 13 million 401(k) participants are sticking with their original asset allocation for the long term.

Meeting in person. Certain investors now want to meet the people investing their money in person and look them in the eye. "Some clients want to come in and sit down and have a one-on-one consultation," says Brian Baker, the manager of Schwab's Orlando branch, which has seen a 200 percent increase in foot traffic from two months ago, including clients and nonclients. The company has also been hosting question-and-answer workshops with between 10 and 100 clients at its 300 locations, and is encouraging clients to call its 24-hour customer service line. Baker says customers regularly call in during the wee hours of the morning or after watching the nightly news. "As a result of that dialogue, it does lead to changes as to what their asset allocation might be and what their risk tolerance is," says Baker.