Scott Sobel Quoted in InvestmentNews.com Article

Media & Communications Strategies, Inc. President Scott Sobel was quoted in an InvestmentNews.com article entitled “How to Handle a Scandal”-
How to handle a scandal

Crisis triage easier when the brand is strong to begin with, experts say

 

By Liz Skinner

Jun 13, 2014

With controversies involving personal conduct toppling more than one financial professional in recent weeks, some advisers are questioning how they would — and should — act if their brand was tarnished by scandal.

An issue such as the one brought to light at the CFA Institute this week — its president and chief executive, John Rogers, stepping down amid allegations of an affair with a colleague — requires the firm or institution to remind the public of what it stands for and explain that it will handle personnel matters in-house, said branding expert Lida Citroen of LIDA360.

“When there is an issue, firms need to reiterate their values,” said Ms. Citroen, who works with many financial services firms. “That’s why having a strong brand is so important to begin with.”

Firms also should stress that they value the privacy of their employees in the same way they respect it in their client relationships, she said.

Reminding the public about the strength of the company’s reputation is how it gets the discussion away from a focus on an individual’s personal indiscretions, Ms. Citroen said. If a situation involves some type of infringement of work responsibilities or questions about the care of financial assets, then there are likely legal steps firms should follow on the advice of an attorney, she said.

In the case of Sterne Agee Group Inc., which fired longtime chairman and chief executive James Holbrook Jr. a couple weeks ago, the company hasn’t spelled out why it took that step, so it’s unclear how that news will impact its image.

“When it’s a matter of a moral judgment, it’s easier,” Ms. Citroen said. “People say, ‘I might not like the way my financial adviser lives his or her life, but if I’m being taken care of as a client I can excuse different things.’”

Scott Sobel, president of Media & Communications Strategies, said firms should have crisis plans developed in advanced that include how to refresh the company’s reputation after a negative event.

“The sooner they can figure out what to do in the face of a crisis, the better,” he said. “The longer they fumble around, the harder it is to fix and the more likely it will be a business-interrupting event.”

Ms. Citroen recommends that firms monitor what is being said online about the situation and the firm during a crisis, but she doesn’t think executives should respond to everything written. A back-and-forth on social media, for instance, can quickly elevate into a fight that the public is following.

“People often feel overconfident behind a screen and say things they wouldn’t if they were facing you,” she said. “The last thing you want to do is start getting into fistfights with people online.”

Clients expect their financial advisers to be wise and be able to handle a high-pressure situation well, Mr. Sobel said.

In addition to having crisis communication plans at the ready, an adviser who is a contributing member of the community and has a solid track record of happy clients will find recovering from any type of scandal easier, he said.

In the end, public relations professionals agree:

• Don’t lie

• Respond quickly

• Have the CEO or president talk to the media

• Practice tough questions ahead of time

• Don’t go off the record
Liz Skinner covers practice management for InvestmentNews and wants to hear any tips or innovative approaches that have helped advisers improve their businesses.