“If you’re in constant communication with your clients,” suggested Aaron Clark, “I think to a certain extent they will stop relying on that media, and they will start trusting your voice a little bit more.”

Chris Costello was not so sanguine: “The fact is we all have certain clients that will watch [the media] every single day, and no matter how much we communicate with them, we can’t compete with that.”

Some clients, confirmed Steve Soden, simply have addictive personalities.
“They just have that personality trait
they can’t not turn on CNBC,” said Soden, “and that’s a problem.”

For Mike Brown, the real issue remains managing expectations. Given the client’s real-time exposure to TV, the Internet and other media—and the ability to track account performance from moment to moment—there is all the more need to trust in a long-term strategy.

“If you can steer them towards long-term market cycle history,” said Molly Kerr, “that always seems to resonate with them.”

Brian Perott agreed but acknowledged, “it’s really hard in this day and age to get your clients to think 3, 4 ,5, 10 years out when they have all this media interaction.”

Creative Planning, Greg Spears explained, “fights fire with fire.” The firm has its own webinars that it produces and sends via email to clients. Said Spears, “they can call us with questions first before they see [Jim] Cramer” on CNBC.

The Federal Reserve

Switching gears, Mike Brown asked his colleagues what they had been hearing with respect to the Federal Reserve. As far as he could see, there seemed to be a shift in strategy from controlling interest rates to controlling the equity markets.

In Scott Boswell’s interpretation, now that consumer spending and wealth cannot be generated through naturally increasing home equity, the Fed hopes to stimulate spending, wealth creation and employment through the equity markets.

“I think the Fed is just trying to buy time,” said Aaron Clark. He believes that the Fed’s strategy is to improve consumer sentiment through a stimulated stock market, in the hope that the consumers will kick-start a real economic revival. Still, he thinks, “at some point there’s going to be a piper to pay.”

“There are always unintended consequences with everything the Fed does,” said Brian Perott. “I’m not saying it would be better if we did things differently because I think it’s a very difficult period of time. But when they’re so focused on one asset class, it creates bubbles.”

Kelly Jernigan does not see a change in the Fed’s focus as much as he sees a new emphasis on transparency. He cited Ben Bernanke’s unprecedented news conference after a recent Federal Reserve meeting. “Keeping rates low through 2013 and continuing a low-rate environment and being very forthright about that is certainly a change in the Fed and Fed policy,” he noted.

Tom Boling sees a down side to transparency. By being so open about keeping rates low, the Fed provides no incentive to the private sector to borrow any money. Businesses know rates are going to be low for a number of years. So they are watching liquidity. “There’s no velocity of money,” said Boling. “So we are kind of stuck in this holding period.”

One reason there is so much focus on the Fed, Scott Boswell argued, is because it is getting no help on the fiscal or regulatory side. Balance sheets may be awash in cash, including bank balance sheets, but there’s no incentive to put that money to work as long as the legislative and regulatory environment remains uncertain and inhospitable.

If anything, Mike Brown added, new regulations—like those on interchange rates—have made it more difficult for banks to make money, and they now have to find ways to make up that lost revenue.