Humans Or Robots? Using Plain Language

by Aram Kupelian

At a basic level, the financial planner's job is to:

• Understand the client's concerns;
• Provide the client with a solution; and
• Communicate the solution to the client so they can easily understand what they need to do.

As financial planners, we tend to be very good at the first two points. However, we often overlook the ability to write in clear, plain language.

There is a tendency in our industry to adopt a writing style that is full of financial jargon (such as decumulation), technical language (for example, crystallisation), and acronyms (UFPLS). This can leave clients feeling confused. Here's why that's a big problem.

The Curse of Knowledge

Before I explain why confusing language is bad, let's first examine why we as a profession use it. Why do we write with such a high degree of formality, when we would never dream of speaking like that to someone face to face?

This habit has to do with a phenomenon called the ‘Curse of Knowledge:' When communicating with someone else, one assumes the other person has a similar level of knowledge and thus the ability to understand them.

With many of our clients being successful, intelligent individuals, it is easy to fall into the trap of assuming they understand the complexities of financial language and want to read it. However the reality is often very different.

In 2012, Professor Christopher Trudeau, undertook a study called ‘The Public Speaks: An Empirical Study of Legal Communication.' This study researched the use of language in legal documents.

He presented 11 pairs of passages presenting the same message to the reader, one in plain language and the other in more complex legal language.

Trudeau’s study found that:

• 80% of people preferred sentences in plain language.
• As the complexity of the subject increased, so did the preference for plain language.
• As the education level of the respondent increased, so did the preference for plain language.
• 0.5% of people were impressed by the use of complicated legal terms or Latin words.
• 44% said they have stopped reading a document out of frustration due to a lack of understanding.

What Trudeau's study shows is that although readers may understand complex language, it doesn't mean they want to read it. You will impress only a tiny percentage of clients but almost half will stop reading altogether!

Overcomplicating the language used can have unwanted consequences:

• Resistance - The study shows that if the reader gets frustrated there is a high chance they will stop reading. For a financial planner, this means the advice process stalls. For the client, it is an unsatisfactory outcome. Nowadays, people want things faster and easier, especially clients who are time poor. Using plain language reduces as much effort for the client as possible. We already help to make things easy for the client by pre-filling forms, for example, however it may not get to this stage if the client can't understand the advice to start with.
• Ambiguity - This causes confusion. If you have two ways of referring to the same thing, the reader will assume you are referring to different things. The need for consistency is important. Stick to one of PCLS, or TFC, for example.
• Lack of Trust - Trust is the cornerstone of a relationship with an adviser. We often advise people at sensitive times such as bereavement and divorce. Our job relies on being able to have very frank, personal conversations about future plans and aspirations that can then seem at odds with very formal, cold language. If you write like a human being instead of a corporation, people are more likely to trust you. In October 2017, Vanguard published a paper called Trust and Financial Advice. They found that that 21% of clients who had disengaged with a financial adviser lost trust because the adviser didn't explain things in a way they could understand.

Plain Writing Techniques

Writing in plain language isn't as easy as it sounds. Luckily, there are many ways to simplify the way we write. Here are five tips.

Write Like A Human

Complex language is a turn-off. Trudeau's study shows we needn't be concerned about ‘dumbing down'.

Compare: "In accordance with your request, please find attached a quotation for your perusal. If you require any further clarification, please do not hesitate to contact us".

with:

"As requested, I have attached a quotation. If you have any questions, please get in touch".

Use Short Sentences And Bullet Points

We are more likely to retain information when we read shorter sentences.

Instead of:

"We believe there are improvements that could be made by realigning the spread of assets within your plans and introducing a broader range of other asset categories with a view to reducing the volatility and overall risk inherent within your existing funds".

Consider:

The existing funds are not suitable for your risk profile.  

Use Short Words

The simpler the words, the easier it will be for readers to understand. Simple words also give your writing a warmer, friendlier tone. This is demonstrated by the following choices.

Accumulation vs Saving

Decumulation vs Spending

Consolidate vs Combine

Utilise vs Use

Be Consistent

Ambiguity confuses your message. Are we recommending they take out life insurance or life assurance? Are they drawing PCLS or TFC?

Use Visuals

This is especially useful for complex material, where important messages may get hidden in a block of text. The use of tables, bold text and colour can highlight important points and make readers more likely to stop and take notice.

Bottom Line

As stated by the Plain Writing Act 2010, which was signed into law by President Obama, we want our readers to be able to quickly and easily:

• Find what they need
• Understand what they find
• Act appropriately on that understanding.

At Holden and Partners, we do try to avoid the use of complex jargon. Even the most valuable piece of financial planning will likely fail if the client doesn’t understand the recommendation.

Aram has worked in financial services for 18 years. He is a Fellow of the Personal Finance Society, currently leading the Paraplanning team at Holden and Partners.

The views expressed in this article are that of this author and do not necessarily reflect the views and opinions of Voyant.

A prior version of this article stated 5% of people in the study were impressed by the use of complicated legal terms or Latin words. The actual percentage is 0.5%. We regret the error.