The New York Times tells us that Wall Street is hiring again. But don’t break out the party hats and $2,000 bottles of Champagne just yet. Wall Street has a reputation problem: Most firms will ignore it, but the smart firms will acknowledge and address it.
Yes I know, I know – Wall Street has a reputation problem every five or six years. This is probably the third such cycle I’ve lived through since I started working in financial services in the late ’80s. Back then, the punchline was a survey on trustworthiness. The good news, Wall Streeters were not the least trusted group in the nation; the bad news, they placed lower than the KKK.
How far has anti-Wall Street sentiment penetrated the public discourse in the current cycle? I had occasion to sit through the animated feature Despicable Me this weekend (save yourselves – don’t do it) during which the evil genius, seeking to finance his dastardly plan, visits the bank to secure a loan. Not surprisingly, the sign over the door read:
More surprising was the all-too-legible subhead:
Does it really matter what the movie-going public thinks? Unlike consumer products companies, Wall Street firms believe they don’t need to curry favor widely. After all, their business model doesn’t depend on millions of people buying a few dollars’ worth of products; it depends on a few people (investment managers) buying millions of dollars’ worth of products.
But there’s another constituency eyeing Wall Street: the government. Elected officials – and the regulatory agencies they control – are extremely sensitive to popular sentiment. As the country gears up for the political fisticuffs of a midterm election, you can expect to see financial services executives on the hot seat.
The best way to handle this onslaught of negative publicity? Don’t fight it, roll with it. If there was wrongdoing – or perceived wrongdoing – admit it. That’s what I advised Bankers Trust CEO Charlie Sanford to do when some of his derivatives traders were in the spotlight, and The New York Times approved. Then find something positive your firm does and talk it up.
Making money isn’t intrinsically evil. Without financial services firms, the world’s economy would grind to a screeching halt. Someone needs to tell this story, honestly and compellingly.