There has been no return to business as usual.

Yes, the markets are open, portfolio managers are making investment decisions and investors are buying and redeeming shares. But the questions that investors are asking of fund companies, the information they want and need is different than it was before Sept. 11--and fund companies are responding.

Many are working to provide as much information as possible in as many ways as possible in order to address the concerns of investors that have arisen in the past two weeks.

Initial responses to the recent tragedies for many fund companies consisted of a letter from a chairman or another executive (See MFMN, 9/10/01). The letters expressed the firm's sympathy and sorrow for the victims and their families and updated any information on the safety of employees. Some also suggested that investors remain calm and keep a long-term investment perspective.

Stepping Up Communication

Those sentiments continue to be echoed, however, now many fund companies have expanded their reaction measures to assure, or at least inform shareholders and financial intermediaries on the full gamut of investment issues. The Vanguard Group, for example, has received many calls from clients since the tragedy asking what effect it would have on the company and financial markets in general.

One of Vanguard's responses was to post the most commonly asked questions on the firm's Web site and answer them one at a time. Those questions have varied greatly in terms of both their depth and scope, from What should I do when the markets reopen?' and Are my assets safe?' to I made a brokerage security purchase on Monday, Sept.10. When did this settle?'

Increased Web Support

Web sites have been utilized a great deal to communicate much of this information, especially for larger direct-sold firms with large numbers of shareholders. "Our Web site is our most effective communication vehicle to get this stuff out," said a spokesman for Janus. "With four million shareholders, it's not possible to [actively] contact each one." Still, the company did contact some institutional clients, he said. And although Janus could not call all its shareholders, the company made "absolutely certain" that representatives at call centers were prepared to answer any questions that might come up, he said.

Front and center on Fidelity Investment's Web site is a message from Fidelity's vice chairman and COO, but also a Current Update on U.S. Exchanges and Trading at Fidelity.' "We will update the information on this site as often as circumstances warrant, and are prepared to answer your questions," the site reads.

Included in the section is general information on the status of markets and Fidelity funds as well as direction, such as where on the site investors can go to check the status of an order placed after 4 p.m., Sept. 10.

Constant Communication

Flow Urged

"We're recommending that clients update their Web sites daily and do many conference calls," said Ann Becker, president of Thompson Becker International, a public relations firm specializing in the financial services industry.

"Investors are going to need reassurance over the long term. This is not one letter to clients and it's over," Becker said. "Firms are going to have to do active reporting and be constantly sending out information in a variety of ways and with much more frequency than they normally would."

However, Quantitative Advisors, the small investment advisor to the Quant Funds, has made information available to shareholders but does not want to overwhelm them, said Heather Dondis, the firm's director of marketing. "We're sending out a touch-base' letter to shareholders by e-mail," she said.

The letter will be short and will let shareholders know that systems are up and operational and that they should call the company's sales reps or shareholder services with any questions they may have. "People are getting inundated with a lot of stuff. We just wanted to send out a simple letter saying, Hi. We're here. Bear with us and bear with this market.'"

Human Touch Provides

Greater Impact

It is important that firms make information available to shareholders, but Quantitative is relying heavily on its reps to communicate with shareholders and ease their concerns. "This is the time for the reps to really step up and protect the assets and the relationships with clients," Dondis said.

"Our approach has been to first, get out all the information possible about what we're doing," said Joe Rob, president of the Sentinel Funds. "Second is to let people know where we stand in terms of our capabilities. Then we talk about, in general, where we think the market will go." The firm is doing that in several ways. It has sent a mailing to financial planners, registered reps and other clients addressing those issues and has kept its phones open with added staff to take calls.

Importantly, the company also utilized conference calls on a broad basis to better inform clients and be able to answer questions on a greater and more efficient scale. Senior management conducted two conference calls the week of the tragedy to discuss everything from the company's servicing and pricing capabilities to how key investment executives thought the market might react, Rob said. Sentinel's smaller size allowed the firm to contact lists of clients and invite them onto the calls. It reaped more than double the participants it expected on those calls.

Putnam Investments also set up conference calls, but those were geared to top level advisors, a spokesman said. In place of company wide conference calls, the firm created a Web broadcast that first aired on Sept. 14 at

5 p.m. Putnam CEO Lawrence Lasser and other key executives discussed the effect of the terrorist attacks on markets, the economy and world affairs. The company also made available a special report on capital market outlooks, which discussed analysis and predictions for what might happen once the markets reopened.

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