It’s no secret that financial services firms aren’t the best when it comes to communicating with their customers. Almost across the board, no matter what the medium, the experience can be dry, dull and impersonal.
Part of this is simply a fact of life in the industry.
Unlike, for example, in retail, financial professionals have to operate in a highly regulated space where just about everything they say to or share with the public at large is closely scrutinized and structured. And that’s not to mention the fact that finance itself is highly complex and confusing to the average reader.
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We’re not talking about an easy or accessible topic here.
The State of Financial Communications
It’s gotten so bad that, in fact, that software company VisibleThread recently named finance company websites the most difficult to read among all major industries.
“The websites of investment firms suffer from low readability, excessive use of passive voice, long sentences and complex word use,” the report found. “Asset management firms and financial services organizations remain the least trusted industry in 2019, according to the Edelman Trust Barometer. Investors are holding back due to perplexing terminology. Our report asks, has there been any improvement in clarity and transparency of asset management websites since 2018? And what can asset management firms do to improve consumer trust?”
Ouch.
The firms that scored highest in website readability were Vanguard, Federated Investors and Putnam Investments. At the bottom of the list: BlackRock, BNY Mellon Investment Management and Santander Asset Management.
That’s the bad news.
But understanding how the industry got to this point can help point to a solution that will get finance out of its communications doldrums. Here are a few of the contributing factors:
Finance Content and Regulatory Oversight
As mentioned, there’s no getting around it.
Financial services as an industry operates on a different plane that most others, in large part because it is regulated and so much of what is said has to meet certain conditions. Solicitation, privileged information, investor access…the list of what can and can’t be shared is long and involved.
As a result, many in the industry have simply decided to play it safe, which is a totally reasonable response to this kind of oversight.
The penalties for direct solicitation, for example, are steep an onerous. It just makes sense to stay far away from the line rather than tempt an enforcement action.
Financial Topics are Just Too Complicated
Par values, pips, coupon rates, alpha, beta…
I get it. Financial products are complicated. And, those that work in the industry bring a lot of deep institutional knowledge to the table when interacting with clients and customers.
That naturally results in communications that are complex and hard to digest.
Sometimes this is a good thing. When you’re dealing with high-dollar, complicated products, it often just makes sense to demonstrate your mastery of it to the client by using all of those buzzwords and dazzling them with your terminology.
But that doesn’t work in general communications.
The mantra today is relatability. Educate, don’t embarrass. That’s one area that keeps finance website readability so far down the scale.
Academic Writing Isn’t Effective
I know, I know. There is a place in this world for heavy, wordy academic writing.
That place is in academia.
Passive voice, dense copy and footnotes upon footnotes upon footnotes are great for sharing deep, complex information but they don’t do anything for readability and actually have a tendency to drive customers away from your content.
You can easily see the results when academic writers try to write corporate copy.
Why Finance Needs to Communicate Better
Per the report: “Firms must re-write complex communications using simpler, more accessible language. Simplifying content makes it easier for investors to understand and engage with products and services.”
Consumers have choices, in their financial services providers just like they do everything else.
Gone are the days when “good enough” will get the job done. The time is now to step up and meet buyers where they live with clear, concise and engaging content and communications.
Those that do will rise to the top of the heap among Millennials and younger customers. Those that don’t… well, they might fade from view along with their older client bases.
Want to know more? Layup Content works with financial services companies every day to help them better communicate their value, tell their stories and stand out as thought leaders. We’ve been doing this for years and know the specific problems you face in this competitive industry. Let’s talk.