Study finds that the top 60 asset firms’ messaging to clients is less than half as easy to read as the popular wizard books – and that’s harming trust
From Wealth Professional by Steve Randall
Asset managers have work to do to improve their communications with clients according to a new report.
An analysis of the websites of the sixty largest asset firms has found that there has been little improvement in the way firms communicate with their audience.
This follows another recent report that called on investment industry firms to embrace the opportunity for strong digital communication channels.
In this latest study, only two of the firms had websites that were deemed to be understandable by the average consumer. This includes both COVID-19 and more general content.
The VisibleThread analysis is included Flesch Reading Ease Test assessment of websites. The test determines the readability of a text based on metrics such as length of sentences and the average number of syllables per word.
The average score for the asset manager firms included was 36, slightly better than the Harvard Law Review (30) but falling far short of popular classic novels Moby Dick (58) and Harry Potter (73). Even an academic paper on chess (40) is simpler to read.
The complexity of asset manager communications means weaker customer experience and an erosion of trust the study says.
“Investor communications are mission-critical to asset management firms. Improving efficiency and clarity reduces risk for these firms. And, firms can achieve this when transparency takes priority,” said Fergal McGovern, CEO, VisibleThread.
McGovern says that it’s disappointing that there has been little change from previous years, especially given the general trend towards better customer experience.
The report shows that asset managers continue to use too much industry jargon in their customer messaging.
“These unclear communications can damage relationships. Each time a customer must contact their firm due to complex language, it has a negative impact,” McGovern added.
The biggest mistakes
Among the key issues that the report found with communications is using sentences that are five times as long as the recommended level of around 25 words.
Overuse of ‘passive voice’ is another common mistake. Giving clear direction on who should take action should be utilized instead.
Given the magnitude of the pandemic crisis, the analysis found that 30% of firms did not mention COVID-19 on their website, leaving investors wondering about the impact of the crisis on their investments.
Earlier this year, JD Power reported that Canadian investment firms risk losing clients by providing inadequate websites.
Manulife Investment Management was one of the worst performers in the new VisibleThread study, ranking 58th out of 60 ahead of Nomura Asset Management and Wellington Management.
The top performers were Dutch firm PGGM, followed by Federated Hermes and Barclays Wealth Management.