Brokers Take New Tack in Response to Crisis

Caroline Maxwell, InvestorsOffshore.com

29 March 2001

Top brokerages such as Merrill Lynch, Fidelity, and Charles Schwab have announced that they will be taking a completely new advertising tack in order to woo nervous investors back to the stock markets, and other service providers such as Citigroup and T. Rowe Price have been forced to scale back budgets as a result of bearish investor sentiment.

Gone are the celebrities and high-flying athletes that were used to pitch Wall Street's wares in headier times. Brokers are now seeking to disseminate comforting messages through their advertising, and to reassure investors with expertise and advice.

For their new campaign, Schwab have wheeled out their namesake, and the company's founder, 'Chuck' Schwab to underscore the new no-nonsense message of 'Smart answers for today's markets'. Jack Calhoun, the company's senior v.p. of advertising and brand management explained the thinking behind this move: 'He is the voice, the soul, the ethics of the company. We hear all the time from customers about how much they revere Chuck,' but quickly qualified this with: 'Institutionally, he's more useful to us than as a product pitchman.'

Merrill Lynch have a slightly more challenging re-branding task ahead of them, as their bull logo could be seen as unfortunate in these lean times. The company has revived the straightforward reassuring approach that saw them through the 1987 market slide, although Charles Mangano, their first v.p. of marketing and communications feels that the mood this time round is different, and that investors are not as panicked as they were during that period: 'In '87, people were fairly shocked; they got very emotional when they needed to be rational' he explained. 'Back in '87 investors were limited in the kind of information. Now, thanks to the internet, we're seeing people respond in a fairly analytical manner.'

Meanwhile, Citigroup have announced a cut in marketing costs, and many of the online contingent are now concentrating reduced advertising budgets on new non-trading products.

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