If you’re in the financial services industry and have or work with clients, you must proactively address the mess at JPM – lack of action will be detrimental to you and your business – guaranteed.
More on this in a minute. Last week was like a bad dream. And a recurring one at that. It makes you shake your head – over and over. The person leading the public fight against more regulation and Dodd-Frank, the bank that made it through the financial meltdown virtually unscathed, just gave its opponents the greatest gift imaginable. Politicians are salivating and the sound bites have been flying.
Among other things, it makes you wonder yet again whether bank CEOs really understand how the markets interact with the financial instruments that they have created. I have a lot of respect for Jamie Dimon – but this one is bad. Really bad.
Importantly, it affects every person in the industry, and not in a positive way. Frustrating is that we are all tainted, because in today’s political environment it’s easier to blame entire groups of people than to pinpoint the real culprits. “Main Street” never got over its hatred of “Wall Street,” and now people are once again asking “Is my money safe?”
If you haven’t already, you must communicate with your clients about what is going on at JPM – it’s not too late, but soon will be, because this controversy is not going away quickly.
My general advice is to 1) explain without defending what happened; 2) reassure that this in and of itself is not an event that will lead to another systematic meltdown; and 3) acknowledge that it has demonstrated weaknesses in the system and the need for some common sense reforms and/or regulations.
And specifically to you and your business 1) reiterate your stated or unstated code of ethics and commitment to client service; 2) remind how you demand and ensure complete transparency and accountability in your business; 3) emphasize how client assets are protected and safeguarded; and 4) make yourself available to answer questions and personally address any client concerns.
This too shall pass – but only if you stay in front of it.
