* Advisers providing extensive advice on debt crunch
* Mass emails, social media, among the tools used
* Merrill webcast gets many viewers-Bank of America
* One adviser says more question of disgust than fear
* Some see opportunities for clients if rates rise
By Lauren Young and Beth Pinsker
NEW YORK, July 28 Most financial advisers are
holding a lot of hands this week. Many of their clients, with
the horrors of the financial crisis so fresh, are getting
scared by the possibility of a United States' debt default.
But while Americans may blame sleepless nights on their
lawmakers, they can't complain too much about the range of
advice they are getting from the financial community. If
anything they may be getting overloaded.
Using not only email, text messages, websites and phone
calls, but all the social media tools like Facebook and
Twitter, financial advisers have sought to preach the need for
calm on a mass scale this week.
Indeed, if there is a deal in Washington to extend the debt
ceiling before the U.S. government threatens to default it
could go down as one of the most over-communicated financial
non-events ever, even rivaling Y2K in 1999.
"It's my practice's position that we should be more
disgusted by what is happening than fearful," said Scott Tiras,
a senior financial adviser with Ameriprise Financial (AMP.N) in
Houston, who has has done his communicating with 650 clients
mostly via mass email, spelling out his theories that this is a
"We believe that this too will pass but not necessarily
without volatility in the short run," Tiras said. "We are not
suggesting any major portfolio changes at this time," he wrote
in an email to clients this week.
Matthew Tuttle, who manages $100 million as the chief
investment officer at Tuttle Wealth Management in Stamford,
Connecticut, said he has relied on more conventional forms of
technology to spread the word - a mix of phone calls, text
messages, emails and webinars.
"DEFICIT HITS HOME"
But it is when he talks to people in person that he truly
senses the anxiety and displeasure in people's voices, and why
he tries to keep things calm: "People are angry that the
government can't get their act together and worried about the
long-term impact on our country."
Major financial institutions are turning to the Web and
other electronic means to communicate information to their
Merrill Lynch's [MERUS.UL] homepage now features "The
Deficit Hits Home", an 18-minute video interview with Sallie
Krawcheck, who is president of global wealth and investment
management at Bank of America (BAC.N) and Mark Zandi, chief
economist at Moody's Analytics, talking about the impact of the
deficit on the nation's future.
The segment ends with a list of investment ideas for
clients to discuss with their financial adviser, including a
focus on high-quality large-cap stocks, diversification to
overseas - including emerging markets - and a rebalancing away
from U.S. Treasuries which could be hit by inflation and higher
interest rates. According to a spokeswoman at Merrill's parent
Bank of America, it "is one of our most highly viewed webcasts
Fidelity [FIDIN.UL] updated its website home page on July
26 to include a "Guide to the debt ceiling" and the
Boston-based company's main Twitter feed was promoting a new
Q&A on the debt ceiling that the company posted on its site.
Fund giant Vanguard is now featuring a note from Chairman
Bill McNabb declaring "Default is not an option" on its main
web page. Charles Schwab (SCHW.N) is leading with a "market
commentary" with the company's perspective on the debt
Twitter is also abuzz with news about the debt ceiling and
what it means for consumers.
There are tweets like "What would happen if Congress
doesn't raise the debt ceiling? Sign up for our newsletter -
full report coming Tuesday www.GGFS.com". That is from Oliver
Pursche, president of Gary Goldberg Financial Services, based
in Suffern, New York, and helps him communicate with existing
clients and pitch to potential ones.
The company also is utilizing LinkedIn, Facebook,
newsletters and a blog to get the word out on any breaking
developments and spread its advice: "With regards to a
potential default or credit rating downgrade, we separate the
two and explain that it is important to view the two as two
different events," he said. "We do not believe that the U.S.
will default on its debt or obligations, technically or
Despite all of the gloom and doom, there are positive ways
to spin the debt debacle. Barry Glassman, president and
certified financial planner at Glassman Wealth Services in
McLean, Virginia, says his message to clients is that the world
isn't facing financial Armageddon.
If anything, the fallout is higher interest rates, which is
good for his high-net-worth clients who have fixed mortgages
and a huge need for investment income.
"I don't know anyone with a 5-year Treasury bond who
doesn't believe they won't get their interest and principal
back. If yields do jump, my clients would love 10-year
Treasuries with a 5 percent coupon."
And certificates of deposit will offer even higher yields,
added Glassman, who manages about $470 million for 100 families
with average accounts of $4 million.
Glassman blasted an email about the debt ceiling last
Thursday, and he plans another one for the weekend, if no
resolution is in sight.
(Additional reporting by Lou Carlozo. Editing by Martin