With fund companies slashing their budgets in this protracted market slump that was made only worse by the terrorist attacks of Sept. 11, consultants are offering firms a bit of advice: Don't cut so much that you eviscerate your ability to communicate with investors.

Companies aren't exactly flinging press releases announcing budget cuts across the Internet, but consultant Chip Roame says they are happening--and on a wide scale. "We hear bitches and moans about not hiring, cutting programs or putting things on hold," Roame said. "I think everyone is. I haven't heard of anyone who is standing pat."

But the consultant, based near San Francisco, wonders if companies may be cutting too far. "Are you being too short-sighted as a fund company?" he asks. "Are you cutting back things that are going to dampen relationships for years to come?"

The key, as the country recovers from the attacks and goes to war to avenge them, is to communicate with jittery investors, he said. He suggests firms assemble kits to help their advisors stay in touch with their clients. They can be low-cost programs, such as a quick PowerPoint presentation that offers advice and reassurances that markets will, indeed, rebound and investors should stick with their long-term plans.

"Let's get people a little more realistic," he said, "Tell them, You may have a down year.' There's something healthy about that to me."

So far, such communication tools are scant, or if they are out there, Roame hasn't seen them, which, he says, is telling in itself.

Thompson Becker International, a Boston-based financial PR and marketing firm, meanwhile, has assembled a skeleton version of thme kind of tools Roame suggests. The firm posted a communications kit on its Web site [thompsonbecker.com] in September. It includes tips and sample letters for companies that may be overburdened with investor communications in the wake of the attacks on New York City and Washington, D.C. The resources are available at no charge.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.