To serve clients well, investment professionals need to deliver their messages effectively. They need to explain their ideas clearly, and they need to do it in a persuasive and consistent manner. But according to CFA and consultant Tom Brakke, experts who try too hard at communicating their ideas may be losing sight of their real purpose.
“A good example is a typical investment review meeting. We tend to follow a standard template, where we come in and talk about the economy and then the market. Frankly, a lot of that is of little value,” he told the CFA Institute. “If you ask clients what is really helpful to them, how would they structure the meeting? I don’t think they would structure [it] the same way.”
Brakke explained that needs differ widely among different clients. Individual clients have different financial goals and challenges, while institutional clients are generally concerned with spending policies and covering liability streams. “It really doesn’t have anything to do with what’s going on in the market the last quarter or whether you happen to be 10 basis points ahead or behind,” he said.
Why are investment professionals struggling so much? It may be because in their mind, a conversation with a client is like “a verbal tennis match”: they’re so used to formulating an opinion and defending it, and that competitive orientation tends to leak into other dialogues they’re having with their customers.
“It’s better to say too little,” Brakke said. “The error is typically to say too much. If we err toward too little, we’re probably still giving out plenty of information, and there’s room for engagement. It’s much more productive and much more fruitful to all parties when we have active engagement.”
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