3 ways to speak plainly while giving financial advice

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I love plain English.  So I was delighted to find a section called “Speaking in Plain English” in How to Give Financial Advice to Women: Attracting & Retaining High-Net-Worth Female Clients by Kathleen Burns Kingsbury. I’ve known the author since at least 2010, when she guest-blogged for me about “Five Tips for Delivering Bad News to Clients.”

Kingsbury suggests three ways to improve your in-person communications with clients.

1. Work with a partner

Work with a partner, suggests Kingsbury, following a method suggested by Jennifer Moran of Daintree Advisors. If you present to the clients while your colleague observes, your colleague can “be on jargon patrol” and watch for signs of client confusion, she says.

Your partner’s polite request for clarification of jargon, “allows the client to save face.” It’s probably a bit awkward for your colleague to attend strictly as an observer, but you could switch roles for part of the meeting.

If you attend enough meetings using this approach, I imagine that you’ll gradually improve your use of plain English.

2. Record some client meetings

Sometimes it’s not practical to bring a colleague to meetings. In that case, ask some clients if you can record meetings. Phrase your request carefully, so you don’t alarm them. “Explain that the purpose of the tape is to improve your communication skills and that it will be kept in confidence and promptly destroyed after it is reviewed,” says Kingsbury.

Later, listen critically to the tape. When you notice jargon, think about how to explain those ideas better the next time.

To take Kingsbury’s approach one step further, I suggest you test your plain English explanations on family members or friends who are not experts.

3.  Empower clients to stop you

“. . . empower your clients to stop you when you use words or concepts they are unfamiliar with,” suggests Kingsbury. In an email to me, she provided some suggestions about how to word the request.

In the financial field we use a lot of jargon. While I try not to do this in client meetings, sometimes I forget.  Please let me know if there is anything we discussed that you don’t understand or that you would like me to explain again.

Another way is to say,“We covered a lot today and I have a bad habit of talking in technical terms. I know you are very smart, but I want to make sure you understood what I covered today. Is there anything that you would like to go over again or have me explain in non-technical language?

 

 

Disclosure: I received a free review copy of this book from Kingsbury. At a quick glance, this book looks like a practical resource for advisors to women. It’s scheduled to become available on September 7, 2012, but you can pre-order on Amazon.

Nice analogy for asset allocation

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A good story or analogy can boost the power of your communications. It will linger long after the rest of your conversation fades.

I like the following example, which I found in “Tuning up implementation of modern portfolio theory” by Scott MacKillop:

Now let’s talk about combining managers in portfolios. The legendary football coach Knute Rockne said: “As a coach, I play not my 11 best but my best 11.”

This is how we should build portfolios.

I’m no football fan. I won’t even watch the Super Bowl. But this quote resonated with me because it makes the point that it’s how  your players—or portfolio holdings—work together that’s more important than how the players perform individually. For example, you’ll typically be better off with a well-diversified portfolio of complementary holdings than with a bunch of top-performing stock funds.

I threw my copy of Investment News, where this appeared, into a file in my office so I could share it with you.

As you write about how you manage money, look for analogies like this that concisely convey a lot.

 

Note: This post, originally published in 2012, was expanded on Dec. 9, 2022.

POLL: When is it okay to write “equity market” instead of plain English?

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I change “equity market” to “stock market” tens of times every three months when I edit asset managers’ quarterly investment performance reports. Am I doing the right thing? The answer isn’t as clear as I, accustomed to clients who invest solely in stocks, initially thought.

Equities vs. stocks

Some of my wise colleagues on LinkedIn gently reminded me that equities include both publicly traded investments – meaning “stocks” – and privately traded investments, such as private equity or venture capital. So, there are times when “equity market” is more accurate than “stock market.” If market strategists’ comments cut across these investments, they might prefer the term “equity market.”

Plain English is easier to understand

While “equity market” is technically correct, I prefer to use plain English. I figure most of the time “stock market” is inclusive enough. For example, a friend pointed out that many stock mutual funds may use derivatives, which are not “stocks” in the narrowest sense of the word. However, I figure the portfolio manager’s market commentary isn’t going to dig down to the level of derivatives, so it’s fine to refer to it as “stock market” commentary.

Even if a writer digs beyond stocks, I’d prefer not to use the term “equity.” After all, many Americans’ only association with the term is “home equity.”

SEC chairman’s high standard for financial disclosures

I’m railing against “equity” because, as I said in “The Levitt Test for financial risk disclosures,” I agree with the following statement by former SEC chairman Arthur Levitt:

For the language of financial disclosure, we need to raise the standard from “potentially understandable” to “impossible to be misunderstood.”

I wish I could offer you a sleek, plain English alternative to “equity market” that incorporates more than just stocks. My first thought is to list the forms of investment under discussion, such as “stocks, hedge funds, and private equity.”

If you have a better idea, I’d like to hear from you.

Please vote in my poll

Please vote in the poll that appears in the right hand column of this blog.

Question: When is it okay to write “equity market” instead of plain English?

Answers:

  • Never
  • Only when the corporate style guide requires “equity market”
  • Only when your discussion includes more than stocks
  • Whenever you please
  • (Add your own answer)

What’s the scoop outside the U.S.?

I’m mainly familiar with U.S. practices. A European LinkedIn colleague told me that in the United Kingdom they use “shares” instead of “stocks.” I welcome any comments on practices outside my home country.

Evoking emotions boosts the power of your writing

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“I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

-Maya Angelou

Quarterly investment letters–Tell me “What makes them great?”

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Quarterly investment letters are central to many asset managers’ communications with their clients. That’s why I’m asking your help in defining what makes them great.

Please answer my six-question survey (NOTE: I’ve removed the link to this expired survey]. I’ll report on the results in a future blog post.

You inspired me. Thanks!

Investment professionals care intensely about these letters, as I learned when I asked members of  my LinkedIn Groups the following question:

The responses to this “one word” question inspired this survey. I feel fortunate to belong to this community. Thank you!

You vs me — or we: A rant on financial marketing

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Investment and wealth management executives like to talk about themselves. Who doesn’t? But this hurts their firms when it’s reflected in their marketing.

Photo: World Series Boxing

What financial advisors say about you vs. me–or we

A group of financial professionals helped me test my belief that talking about “you,” the audience, is more powerful than discussing “me”–or, by extension, “we,” the company that’s marketing to you.

Here’s the question I asked participants in “The Power of You: The Secret of Great Blogs that Boost Your Readership”:

Which introduction do you prefer? Introduction #1 focused on you, the audience or Introduction #2 focused on me, Susan. Explain your choice.

Prior to asking the question, I’d introduced my webinar in two ways. In Introduction #1, I’d discussed the benefits my audience would receive from watching my webinar. In Introduction #2, I described my blogging success and other credentials related to the webinar’s topic.

You may wonder how my two introductions relate to you, if you’re a financial advisor, investment manager, or wealth manager. In my experience, many financial websites – and other marketing pieces – use Introduction #2. They are about “we, the firm,” not “you,” the prospective client.

The results? A knockout by “you”

Respondents unanimously preferred the introduction focused on “you.” Here are some of their comments about why they preferred a focus on “you” over a focus on the speaker.

  • When you spoke about yourself, I stopped listening
  • You connects with me, lets me know whether it’s useful
  • I don’t care about you, but I do care about what I can do to be successful
  • “I” sounds pompous
  • It’s not about the speaker, it’s about meeting the need of the target audience.

What this means for you

When writing marketing materials or client communications for your firm,

  1. Use “you” more than “we”
  2. Communicate in terms of benefits to your readers more than products, services, or characteristics of your firm
  3. After you write something, ask yourself, “Why will my reader care about this?” If it’s not obvious, then delete or re-write.

Which do you prefer for your company – marketing materials that use “you” or “we”? Why?

Please comment on your opinions.

Mind mapping your way to client appreciation: An FPA article

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Mind mapping has rescued me many times. “A mind map can be a complexity buster, translator, connector and simplifier,” as mentioned in the online blurb for the article discussed below.

“Mission: Map a Better Client Value Relationship” describes how one advisor uses mind maps to help clients understand why they should pay for work other than money management. Essentially, creating a mind map helps clients to visualize the value of other services provided by their advisors. This article by Gary Klaben of Proninus appeared in the Jan./Feb. issue of the Financial Planning Association’s Practice Management Solutions magazine. I suggest you read the article.

For more on mind mapping, check out the following blog posts or learn to use mind maps as a writing tool in “How to Write Blog Posts People Will Read: A 5-Lesson Writing Class for Financial Advisors.”

How to manage a group blog: Financial advisor edition

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I imagine a group blog run by financial advisors would face several challenges in producing interesting, high quality blog posts on a regular schedule.

Image: HikingArtist.com

These include the following:

  • Coming up with mutually agreeable topics for blog posts
  • Setting a schedule for publishing blog posts
  • Getting posts written, edited, and approved

I have ideas about how to tackle the challenges.

Brainstorm as a group

Need topics that will satisfy your group as a whole? Try brainstorming topics in a meeting with the other blog contributors.

By the way, I’m assuming you need to satisfy the group because you’re blogging with other employees of your firm. If not, agreement may not be necessary, but group discussion is still a spur to creativity.

Create an editorial calendar

It’s easier for your team’s writers to contribute regularly if they have a schedule.

Here’s a sample editorial calendar for a group blog:

MONTHLY EDITORIAL CALENDAR
WEEK NUMBER TOPIC
1 Children
2 Career
3 Retirement
4 Estate planning
5
  • Jan. −Guest blogger re: home decorating on a budget
  • [Feb. − NO 5th week]
  • March−Last-minute tax moves that will save you money on April 15

Notice how subject areas repeat on a regular schedule, making it easy for writers to know when their posts will run. Once they know that, they should be able to calculate dates by which their first drafts are due.

Create a process

You don’t want contributors to turn in their posts at the last minute. This is why you need a well-defined process with due dates. The process might include the following steps.

  1. Submission of first draft for content review and proofreading
  2. Rewriting, if necessary
  3. Compliance review
  4. Rewriting, if necessary
  5. Publication on blog
  6. Monitoring and responding to comments

Other tips for group blogs?

Please share your best tips for managing group blogs. I also welcome your questions.

 

2015 update: In a LinkedIn discussion, Stephanie Sammons of WiredAdvisor mentioned CoSchedule as a useful tool for group blogs.

Guest bloggers: 2011 in review

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I’m thankful for the knowledgeable and talented professionals who have contributed guest posts to my blog this year.

Here’s a list of guest posts sorted by topic, including client communications, marketing, social media, and writing.

Client communications

Marketing

Writing

Other financial topics

I also hosted some wonderful guest bloggers last year. See “Guest bloggers: 2010 in review.”

This post was updated on Dec. 28, 2011.

Poll: Should institutional investment managers be likable?

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Photo: jpctalbot

Writing likable emails can help you and your firm differentiate yourselves, as I discussed in “Reader challenge: How can investment and wealth managers apply this tip?”

However, institutional investment managers’ emails aren’t known for likability. In fact, they’re more apt to be formal and impersonal. They may feel this suits their corporate personalities as portfolio managers for corporations, government bodies, foundations, endowments, unions, and other organizations.

Here’s my poll question: Should institutional asset managers strive for likability in their sales, marketing, and client emails? Your choices include the following:

  • Yes, always
  • Yes, most of the time
  • Yes, but only when they have a personal relationship with the recipient
  • No, it doesn’t matter
  • [You can also enter your own answer]

Please answer the poll in the right-hand column of my blog and add your comments below. I’ll publish the results in my e-newsletter.