Written Advice: Should it be Clear? or Concise? Or Effective?
Advice Processes & Best Practice Advice & Compliance & Financial Advice

Written Advice: Should it be Clear? or Concise? Or Effective?

November 17, 2017

by Tony Vidler  CFP logo   CLU logo  ChFC logo

simplifying statements of adviceWhen it comes to communicating our advice to clients we are guided by the words used by the regulators, or law, to guide us in how that should be framed or delivered.


Or we think we do.


The written advice, be it financial plans or Statements Of Advice being delivered to clients, are however getting further and further away from the objectives: they are increasingly complex, bureaucratic in format and style, and overloaded with meaningless detail.  Unsurprisingly consumers continue to struggle with the advice process and we all wonder why a highly valuable service is rejected or inspires inaction.


The reason is that we have lost sight of the core objectives of the written advice.  That is; client communication must be clear, concise and effective.  (well that is the law here, and is as I understand it a core objective of most financial services advice laws).



Is it actually possible to achieve this?


When we talk of client communications being “clear, concise and effective” we have a tendency to apply a meaning to the entire phrase, rather than to the individual words themselves.  And the three words have quite different meanings, and may actually counteract each other occasionally.

1.  Clear – to be plain; free of doubt.

2. Concise – succinct; brief.

3. Effective – producing the intended result.


So these three words as used by regulators suggest an ideal outcome.  Pragmatically though perhaps not all three are always possible.  To be effective perhaps you cannot be concise.  To be concise perhaps you cannot be clear.  To be clear perhaps you cannot be concise.  And so it goes on…


Perhaps it is this very confusion that has led to the proliferation of Statements of Advice (SOA) for clients tending to resemble a rather large and monotonous draft of “the reflections of a recluse”.


Once the distinction is understood it follows quite logically that if not all objectives can be met then there must be a clear priority to which the other requirements become secondary.  Which of the three objectives is the priority?


Being effective is the primary objective.


Using language that your client understands and can follow is being effective.  Producing written advice that can not only be followed and understood by the person for whom it is intended, but which is also most likely to produce the intended (or desired) result for the client is what we are aiming to achieve.


To be truly effective there would be minimal jargon, and no unnecessary technical information.  It would be personalized – it is truly about the clients needs, objectives and achieving their intended result.


The second most important objective must be achieving clarity.


The avoidance of doubt is really the benchmark here when you think about “clarity” as an isolated concept.  That is, the concept goes beyond merely being clear about the information an adviser might choose to include…it extends to the obligation to include information that the adviser knows the client should have access to – even if the client isn’t aware of that.  In other words, achieving clarity in written advice goes beyond simply using plain language.  It requires that you use plain language to reveal all the the client has a need to know, whether they asked the right questions or not.


Ideally of course, any written advice would also be brief.  “Brief” is a relative concept though isn’t it?  A paragraph may be brief…or five pages may be brief in comparison to what it could have been…the bottom line really is that the written advice should just be as long as it has to be in order to be effective…But no longer than that!


In order to be effective, your advice should be comprehensive of course.  It should also be comprehensible and able to be acted upon by the client.

THAT is the real benchmark.


Achieving it comes down to being clear about what the written advice priorities are: Clear? Concise? Or Effective?

You might also be interested in this related article:
Sanity Check: A Statement of Advice should be a “statement”


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