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?

October 10, 2022

by Tony Vidler  CFP logo   CLU logo  ChFC logo

simplifying statements of adviceWhen it comes to delivering our written advice to clients there is a tendency to be guided by the words used by the regulators, or law, in how that advice is framed or written.

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 as they are increasingly complex, bureaucratic in format and style, and overloaded with meaningless detail.  Unsurprisingly consumers continue to struggle with the advice process and everyone wonders why a highly valuable service is rejected or inspires inaction.

 

The reason is that “the industry” 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).  When I say “the industry”, that goes well beyond advisers – it is all the vested interests such as education providers promoting complexity, and idealogists drafting laws they will never have to follow themselves, institutions whose primary interest is serving their shareholders and so on. For many of those industry participants, complexity and nbureacracy are good for business.

 

But advisers have to try and deliver practical and meaningful advice that consumers will welcome and use.

Is it actually possible to achieve this?

 

It is, but perhaps we need to re-think the objectives and perhaps determine what the highest priorities are.

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.  In practical terms 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…

 

Not a single one of those objectives is attained with the apallingly long-winded Statements of Advice (SOA) that have been produced in recent years.  For clients these documents are frequently overwhelming, confusing, and make them feel like idiots.  Not surpringly, there is a strong tendency to disengage from the advice process.

 

Thankfully the rule-makers are starting to understand it, although there are a lot of vested interests still pushing hard for complexity.  If we are to re-think how written advice is constructed however and logic tells us that if not all objectives can be met then there must be a clear priority to which the other requirements become secondary, right?  So, 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.  Comprehension is the first goal. Motivation to act is the second.  Creating the “desire to do” is what makes written advice most effective.

 

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.  

Now the key here, which ties into the third objective, is not necessarily to put this information front and centre – but to make it clearly accessible.  Supporting analysis and rationale and educational content has to be available and accessible.  Highlighting that it is accessible in the form of additional documents and separating that supporting information from the actual advice will make the advice document itself more comprehensible.

 

Ideally of course, any written advice will 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!  Brevity invites engagement.

 

Comprehensive advice does not need to be compacted into a 40-80 page document.  It can be a 5 page document, or a 3 page document, with other supporting documents or resources delivered or made available separately.  It needs to be engaging, comprehensible and able to be acted upon by the client.

THAT is the real benchmark of effective written advice.

 

You might also be interested in this related article:
If It Is Not Simple, You Are Not Working Hard Enough

 

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