Noel Hillmann, Founder and Managing Director, Clear Path Analysis - 7th August 2016
It is no longer news that populist politics has taken centre stage across Europe and the U.S with politicians vying for the most contentious Twitter comments on a weekly basis. Surely therefore, stepping into the area of political commentary and opinion is a danger no financial service company should take? Not so, as certain forward thinking financial service commentators recently proved.
The recent Brexit vote was notable for a number of reasons, if not the result itself. Rarely do politics and the views of ‘big business’ mix comfortably, particularly financial services in the aftermath of the Global Financial Crisis. However, Brexit felt like the beginning of a turning point in how financial service figures can once again credibly consider themselves rightful figures of authority. As examples, Helena Morrisey, the revered chief of Newton Investment Management, came out in favour of leaving the EU, publishing her views in the likes of the Evening Standard (a London based tabloid newspaper) as well as industry trade publications with little to no backlash. Goldman Sachs and Citi, the American banking goliaths, supported Remain with reportedly six-figure sum donations. David Harding, the normally secretive but highly respected hedge fund master and founder of Winton Capital Management gave £3.5m to Remain as well as his well-informed analysis. Whilst none of them went as far as stamping statements on the side of double decker buses, it was notable that they felt comfortable to share their opinions.
What was frustrating however was how cautious the Remain camp were to use these informed personalities in front line commentary for why the UK should vote to stay in the EU. The most likely reason was the fear of the ‘elite vs. the rest’ mudslinging being directed their way. But this reaction was ill-judged.
But why are Morrisey, Harding and the U.S. banks proactive communication necessarily positive examples of financial communications?
The answer is relatively simple: financial service firms are voices of reason, facts and not fiction in an era of fear over reality. Whilst none are seeking to win elections, their assessment of real life economics and social opinion is vital when politicians will say whatever matters to acquire power. Therefore, their views on political matters should, and indeed are, increasingly being taken seriously, at a time when elected officials are losing credibility.
Financial service companies would do well to make the most of this opportunity to bolster their positions.
For an example of this, you could look to Harding of Winton Capital. In the days following Brexit, his fund added over a billion dollars in investment gains. Despite the fact he campaigned against Brexit, his fund still prospered because his analysis of what would happen in the event of an ‘Out’ vote was correct. More notably, he didn’t get slammed by any of the usual figures in the tabloid press. The point this example may prove, is that he, as a considered ‘elite’ of the financial services world, was able to impart his views whilst bolstering his credibility as a respectable voice on market matters whilst protecting his investors and reputation.
If the same philosophy begins to be adopted by others across the finance sector, then 2016 may not just be the year the UK started their separation from Europe but also the year financial services began to wave good bye to their communication fears and detach from the past.
Noel Hillmann, Founder & Managing Director, Clear Path Analysis