Advice from the SEC’s expert on plain English

The SEC has tapped William Lutz to lead its “21st Century Disclosure Initiative.”

In honor of his appointment, here’s his “Rules for Writing Plain English: How You Can Write Plain Language by Just Following These 39 Steps” (2018 update: sorry, but his article is no longer available on the website of the Plain Language Association International).

Writing plain English isn’t as easy as the title suggests.

For example, Step 5 is “Keep equivalent items parallel.” Even if you understand what that means, I’ll bet that many people don’t. The article offers a good example of parallel structure. Each of the 39 steps begins with a verb in the same tense. Each uses an imperative verb–a verb that commands you to do something. Parallelism can involve more than just tense, as you’ll see in the Online Writing Lab’s explanation of parallel structures. Using parallel structure in lists makes it easier for your readers to understand you.

Generally, “less is more” applies to writing. But sometimes deleting words can land you in trouble. Lutz gives a good example of that with the “whiz-deletion” he describes at the bottom of his article.

2008 World Wealth Report out from Merrill Lynch and Cap Gemini

The 2008 edition of the annual World Wealth Report is now available.

If you’re evaluating your firm’s business strategy, the report’s “Spotlight: Wealth Management Firms Adapt to Meet Unique Needs of Growth Markets” will interest you.

The changing world of mutual fund distribution

Mutual fund distribution sure has changed since my days as a staff reporter for Dalbar’s Mutual Fund Market News (now Money Management Executive) back in the 1990s.

Darlene DeRemer‘s presentation on “U.S. Retail Distribution Trends” at the NICSA General Membership Meeting on June 23 drove home that point.

Here are some of the key changes impacting asset managers that I heard in the presentation by DeRemer, partner and head of the advisory practice at Grail Partners LLC:

  • Financial intermediaries–especially fee-based intermediaries–are more important than ever with the rise of wrap programs, defined contribution platforms, and variable annuity and subadvisory platforms.
  • It’s harder to know the ultimate client because of omnibus accounting
  • Fees are under pressure, yet revenue-sharing is costing 45 basis points or more
    • Distribution costs are coming out of fund sponsors’ profits, rather than simply out of the fund expense ratio
    • There are new, lower cost share classes, such as W or P shares for wrap or platform shares with about 10 basis points of 12b-1 fees
  • Fund selection at broker/dealers is shifting from individual reps to the firms’ fund selection units (see my other June 24, 2008 post for more on B/Ds’ fund selection)

Shifting emphasis at mutual fund distributors

The rising importance of fund selection units at broker/dealers (B/Ds) was reflected in the June 23 NICSA General Membership Meeting‘s panel on “The Distribution Road Ahead and Back,” chaired by Marty Griffin, director of sales operations for Pioneer Funds Distributor.

Mutual fund distributors are ramping up their efforts to satisfy those units. For example, two-and-a-half years ago MFS Fund Distributors set up an Advisory Resources Group that’s dedicated to servicing analyst teams performing due diligence at B/Ds, said Jim Jessee, president, MFS Fund Distributors. Jessee said, it used to be that reps had the most point-of-sale influence. But now, increasingly, that role is offloaded to the analytic group in the home office.

Eaton Vance is taking an approach similar to that of MFS, said Matt Witkos, president, Eaton Vance Distributors. Those B/D analyst teams are increasing in influence, he added.

Even smaller firms like Pax World Management Corp. are feeling the change. There’s more of a need for communication through the home office, said Keith Bernard, senior vice president.

These mutual fund distribution executives’ employee requirements are changing, too. Analytical skills are more important than 10 years ago. Jessee is hiring more people with the CIMA or CFP credential. He has even hired a couple with the CFA credential, “though I’m not sure how many have the stamina to tackle that one.”

Your website’s "About Us" page could make the sale

The company information in your website’s “About Us” page could make the difference between winning or losing a new client.

“Although it might not solely make a purchase, a bad ‘About Us’ page can definitely stop a purchase from happening,” according to “Why You Must Pay More Attention to Your ‘About Us’ Page” on the MarketingSherpa website.

Keep your “About Us” page up-to-date and filled with information that will convince your prospects’ executives of your firm’s reliability, advises MarketingSherpa.

Investment industry in denial about ethics

There’s a disconnect between what investment managers say about ethics and what they actually do, said Jim Ware of Focus Consulting Group in his presentation on “Ethical Leadership in the Investment Firm” to the Boston Security Analysts Society.

Investment firms ranked ethics as one of their top five values in surveys conducted by Focus Consulting. That’s good. “We believe that ethics and integrity should be the spine of your organization for it to be sustainable,” said Ware.

But, in practice, investment firms don’t always take the high road when confronted with ethical challenges, both routine and extraordinary. In his presentation, Ware listed nine common ethical challenges that investment firms may fail. Many of them concern marketing, such as “putting the best spin on personnel changes” or “hiding the salient features of a product.”

I wonder if there’s an investment firm on earth that hasn’t tried to spin personnel changes.

Read more about ethics in Ware’s article, “Ethical Leadership in the Investment Firm.”

"Making Money Where Others Fail": Morningstar’s knack for good titles

Who wouldn’t want to read an article entitled “Making Money Where Others Fail“?

That was the title of a recent message from Morningstar’s Fund Spy e-newsletter. I subscribe to Fund Spy partly to study their writing style. You can check out the Fund Spy archive.

"101 Five-Minute Fixes to Incrementally Improve Your Web Site"

Stress benefits. Ensure that your copy always shows users exactly how your site will benefit them.”

That’s fix number 4 of “101 Five-Minute Fixes to Incrementally Improve Your Web Siteand it’s a good one. If the people who visit your website don’t find benefits, rather than just features, they’re likely to flee.

But fixing a website that’s missing benefits is likely to take more than five minutes. It’s often difficult for the website owner to put their business’ benefits into words. Getting feedback from outsiders can often help ensure that you’re on the right track.

How to get a portfolio manager’s attention, and other email tips from an investment marketing consultant

It’s not easy getting portfolio managers to open your emails. That’s why investment marketing consultant Jen Dunning sometimes writes her email subject lines completely in capital letters.

“INVESTMENT COMMENTARY – PLEASE APPROVE BY JUNE 30” grabs the reader’s attention where a meeker “Please approve by June 30” would not. Note that she puts her key action verb, “approve,” and its object, “investment commentary,” in the subject line. That also boosts her emails’ effectiveness.

But limit your use of all-capitals subject lines to rare instances of pressing need with people who work for your own organization. You risk irritating your recipient if you use all-caps too often. It flouts the rules of email etiquette and is considered “shouting.”

Some additional email tips from Dunning:

  • Save your pleasantries for the end of your email because busy readers want to get to the point right away
  • Before you attach an Excel file, name it and insert page breaks and headers and footers, including page numbers and total number of pages


Producing investment pitch books without losing your mind, and other advice from Margaret Patterson

Designer Margaret Patterson’s posts about investment management pitch books were among the most popular on my previous blog. Her tips can make producing these important marketing materials less stressful.

Here are links to her posts.

Contact Margaret by posting a comment on this blog. Or, if you’re a potential client, call her at 617-971-0328.