Cutting Caveats from Your Financial Communications

By Wendy Cook

March 11, 2014

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When sharing important but complicated financial concepts such as investment strategy, fiduciary duty and compensation structure, how do you decide what to leave in and what to omit? How much information is too much information when speaking with clients?

Learning versus sharing knowledge

Step one is to recognize the difference between the wisdom you’ve acquired and the right amount of that wisdom to pass on to others in the form of effective advice.

As an advisor, you recognize that the totality of the evidence, not any one point, offers the solid foundation from which you can confidently serve your clients’ highest interests. As such, every detail seems essential to you. And in the context of your own education, it is.

But when it comes to communicating, you must straddle a finely balanced line. Investors don’t want to know everything that you know. They want to know everything that matters about what you know. And here’s the tricky part: They get to decide what matters.

Inform versus suffocate

In crafting your communications, you want to provide enough solid evidence so your readers can reach their own conclusions. That way, they won’t lose their resolve when the going gets tough. But you need to avoid burying them in information overload before they get there.

If you’ve got eight points to share about why investment expenses should be kept to a minimum, pick the two or three most salient ones and explore them as space permits, or briefly list all eight without as much detail – if you can do so in a way that is still helpful. When in doubt, err on the side of covering one or a few points well, rather than trying to cover all possible ground.

If you’ve got eight examples for one specific point, choose one or two of the most powerful ones and keep the rest for another day. Favor the illustrations whose sources are the most objective (academic versus industry-funded), the most respected (such as the University of Chicago versus your local community college) and the most current.

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