We’ve been harping on the importance of plain language in investment product fee statements, which we believe in strongly. But as Brett Arends explains in a recent WSJ column, it’s not just fees that suffer from obfuscation. Financial advisors need to speak to clients in plain language about the entire investment process:
Too often, when an adviser or some other pro talks to an investor, the result is glazed eyes and shuffling feet. And “finglish” is to blame, says Scott West, head of consulting at Invesco Van Kampen Consulting, a unit of fund manager Invesco Ltd. There’s too big of a gap between financial jargon and what normal people speak.
“You’ve basically got a language problem,” Mr. West says.
Invesco just completed a survey of 800 investors to find out which words and techniques work best, and which don’t. The results were loud and clear: Investors hate jargon and technical language.
Finance people may talk about “equities,” “fixed income” and “asset allocation.” Normal people talk about stocks, bonds and diversification. When Invesco tested the phrase “institutional-quality money management,” one focus-group member asked why prison inmates were handling the money.
Source:
“A Tip for Financial Advisers: When Possible, Use English” Brett Arends, Wall Street Journal 5/2/11
http://online.wsj.com/article/SB10001424052748704503104576251092079005276.html
