Has the financial industry regained a measure of trust over the last 10 years? Or, has the financial crisis left a permanent scar on the industry? In the meantime, has the public anger spread to other industries and what can other business leaders learn from communicators on Wall Street?
These were some of the questions raised at “Reassessing the Reputation of Financial Services,” CLP Strategies’ Oct. 19 panel and reception hosted by Newhouse School of Communications and sponsored by the American Investment Council.
As we hoped, a full house of financial professionals gathered at Syracuse University’s Lubin House on E.61st St., NYC, to listen to a provocative discussion. Three leading communications experts from investment banking and private equity were joined by two highly accomplished financial journalists. They candidly explained why financial companies depend on public trust and, ironically, why leaders on Wall Street find it so difficult to communicate effectively. Audio of selected comments from the discussion follow below.
Moderator Gary Kaminsky, former Capital Markets Editor at CNBC and a former Vice Chairman at Morgan Stanley, asked one panelist, Peter Rose, Senior Advisor at Blackstone and Vice Chairman at Sard Verbinnen, to explain the bottom line value of reputation.
Looking ahead, Gordon Goldstein, Head of External Affairs at Silver Lake, a leading private equity firm investing in high technology companies, reflected on challenges facing the social media industry. He noted that Facebook’s recent communications about Russian intervention in the 2016 Presidential campaign show that the company has come to understand the fragile nature of reputation and public trust. He asserted that revelations of Russian interference have been a “shock to the system.” As a result, Washington is already looking at “mechanisms for addressing the problem… just as it did after the financial crisis.”
If leaders in Silicon Valley have begun to respond to criticism and anxiety, why is Wall Street so slow? Perhaps because the industry still won’t clearly articulate its economic and social benefits, said William Cohan, author of, Why Wall Street Matters. Echoing the theme of his book, he called on Wall Street to show leadership by explaining itself to America.
It is nearly impossible to turn back the clock, but in the good times, Wall Street never took advantage of opportunities to present its value proposition to the public. “Mistakes were made,” said Rose. Wall Street never communicated during its best times to establish credibility necessary for the bad times, he said.
But why? One answer is that the culture was unprepared, according to David Wells, head of marketing and communications at Goldman Sachs Investment Management. “We woke up one day and found that all our strengths were suddenly our weaknesses.”
Today, the firm has 2 million followers across all social media channels, including Twitter, LinkedIn, Facebook and WeChat. “We could never have envisioned that in 2005,” said Wells. It was a transformation to which the Goldman culture had to adjust, he added.
While investment banks still struggle, the private equity industry has long focused on a specific benefit: retirement safety for public pension plan participants. As a result, the facts about the economic contributions of private equity are resonating — even in Washington.
To hear the full discussion, including how the Presidential campaign of 2004 influenced the reputation of private equity, the history of Wall Street’s cultural transformation, and memories of the crash of 1987, please click below. If you are interested in learning more about CLP Strategies and our thoughts on reputation and communications, please contact us at 646-569-5504 or at: email@example.com.