The Cloze test for readability

Too much financial content is hard to understand. It uses technical vocabulary. It’s too wordy. It’s poorly organized. But sometimes it’s hard for authors to tell when content doesn’t work. What can they do?

I learned about the Cloze test from reading “Tips and Tools for Consumer Friendly Disclosure” by University of Georgia’s Professor Brenda J. Cude, a National Association of Insurance Commissioners consumer representative. It works as explained in her slide below:

Cloze Test instructions

Let’s experiment to see if the test works.

Cloze test experiment

Here’s a financial disclosure with words blanked out as required by the test. Try to fill them in.

ETFs are subject to ____ fluctuation and the risks ____ their underlying investments. Unlike ____ funds, ETF shares are ____ and sold at market____, which may be higher ____ lower than their NAV, ____ are not individually redeemed ____ the fund.

Options trading entails significant ____ and is not appropriate ____ all investors. Certain complex ____ strategies carry additional risk. ____ trading options, please read ____ and Risks of Standardized____. Supporting documentation for any____, if applicable, will be ____ upon request.

There were 16 blanks in the sample. If you guess 60% (10 words) or more correctly, then the text is considered well-written, according to Cude. Text for which readers score 49% (8 words) or lower needs to be edited, especially if the score is 39% (6 words) or lower, says Cude.

Here is the text of the original disclosure:

ETFs are subject to market fluctuation and the risks of their underlying investments. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.

Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please read Characteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.

How did you do on this test? I suspect that many of you have read enough financial disclosures that this text tested well.

My doubts

I wonder how good a test this. I figure that a highly redundant text would score well because there are so many clues to the missing words. However, I wouldn’t enjoy reading such text.

I looked around to see how others view the Cloze test. In “Cloze Test for Reading Comprehension,” the Jakob Nielsen of the Nielsen Norman Group speaks well of the test as a way to measure comprehension. “Cloze Tests provide empirical evidence of how easy a text is to read and understand for a specified target audience. They thus measure reading comprehension, and not just a readability score.”

Nielsen makes the interesting point that comprehension is different than readability. (I’ve discussed readability in posts like “7 factors that affect reading ease.”) After all, making a sentence short doesn’t guarantee that the reader will understand it.

As a result, I conclude that the Cloze test can be a useful tool to use along with others that I discuss on this blog and in my book, Financial Blogging: How to Write Powerful Posts That Attract Clients.

Thanks, Linda Leitz!

I thank Linda Leitz for drawing my attention to Cude’s work in Leitz’s “Tell it to me like I’m an eighth grader” in the NAPFA Advisor.

Quit hiding your meaning!

Don’t make it hard for your readers to understand your meaning.  Speak directly to your readers instead of hiding your meaning with nouns, passive verbs, and indirect references.

A letter quoted by Joseph M. Williams’ Style: Toward Clarity and Grace illustrates failures you can find in financial writing. His solution can also help financial writers.

Bad example: automotive recall letter

Williams skewers his example of an automotive recall letter as “an example of how writers can simultaneously meet legal requirements and ignore ethical obligations.” What did the writer do wrong? Williams says, “The author—probably a committee—nominalized all the verbs that might make a reader anxious, made most of the rest of the other verbs passive, and then deleted just about all references to the characters, particularly to the manufacturer.” “Nominalization” means turning a verb into a noun.

Here are two sentences from his example to give you an idea of what he’s talking about:

A defect which involves the possible failure of a frame support plate may exist on your vehicle. This plate (front suspension pivot bar support plate) connects a portion of the front suspension to the vehicle frame, and its failure could affect vehicle directional control, particularly during heavy brake application.

Partial rewrite of automotive recall letter

Williams suggests the following new sentence as a partial replacement for the sentences above:

If you brake hard and the plate fails, you will not be able to steer your car.

Williams’ suggestion is much clearer than the original—and way scarier for the reader.

Let’s look at some of the original wording and his replacements to see the techniques Williams used.

  • The original sentence’s “Heavy brake application” becomes “If you brake hard.” Williams undoes the original’s nominalization by turning a noun, “brake application,” back into a verb, “brake.” He also adds “you,” putting the reader in the sentence.
  •  “Its failure could affect vehicle directional control” becomes “You will not be able to steer your car.” Williams changes “vehicle directional control” to “steer” and again puts the reader in the sentence.

Mutual fund prospectus example: before and after

I looked at fund prospectuses. In a quick search, I didn’t find anything as bad as Williams’ example.

Here’s one example with room for improvement:

Many emerging markets have histories of political instability and abrupt changes in policies. As a result, their governments may be more likely to take actions that are hostile or detrimental to private enterprise or foreign investment than those of more developed countries, including expropriation of assets, confiscatory taxation or unfavorable diplomatic developments. Some emerging countries have pervasive corruption and crime that may hinder investments. Certain emerging markets may also face other significant internal or external risks, including the risk of war, and ethnic, religious and racial conflicts. In addition, governments in many emerging market countries participate to a significant degree in their economies and securities markets, which may impair investment and economic growth. National policies that may limit the Fund’s investment opportunities include restrictions on investment in issuers or industries deemed sensitive to national interests.

You can simplify the emerging markets example to something like, “Emerging-markets investments are riskier than investments in developed markets because their governments have historically been less stable and more like to meddle in their economies and stock markets.”

Actually, to be fair, higher up on the page, the prospectus says, “The risks of foreign investments are usually much greater when they are made in emerging markets.” On the other hand, you could be even more direct by saying, “You have a greater risk of losing money when you invest in emerging markets instead of developed markets.”

Do YOU have a favorite poorly written disclosure?

If you have a great example of a poorly written financial disclosure, please share it with me. Perhaps it will inspire a future blog post.


Disclosure: If you click on the Amazon link in this post and then buy something, I will receive a small commission. I only link to books in which I find some value for my blog’s readers.

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Financial content: Ask questions of your readers

Coming up with financial content can be challenging. Where do you get the information to put in whatever you write? Questions are a great source of information for investment and wealth managers’ tweets, blog posts, articles, and even white papers. I recommend that you keep a paper or electronic notepad handy to record questions asked by your writing content

However, sometimes you need a fresh source of inspiration, opinions, and information. It’s time to turn the tables. Ask questions to generate financial content.

1. Ask questions that people can answer with one word

A webinar presenter—I think it was social media strategist Amy Porterfield—suggested boosting Facebook engagement by posing questions that ask for a one-word answer. Because you request little from your audience, it’s easy for them to respond.

Inspired by this idea, I asked on Facebook and in LinkedIn groups for my readers to share one word that defined ideal investment commentary. The volume of replies astonished me. At one point my question was the “Manager’s Choice” on the CFA Institute’s LinkedIn group. It was nice visibility for me. I believe it happened because group members enjoyed the opportunity to express themselves on a topic about which they felt passionately. The group members’ answers broadened and deepened my understanding of my topic.

2. Run an online survey

My readers’ enthusiastic reply to my one-word question about investment commentary inspired me to create an electronic survey about the characteristics of good investment commentary.

Readers’ answers eventually led to “Ideal quarterly investment letters: Meaningful, specific, and short,” a key piece of content on my blog.

I used some open-ended questions in addition to easy-to-answer multiple-choice questions. When you include open-ended questions, you allow your readers to develop original content for you. A meaty blog post can result. However, be aware that analyzing the non-quantitative survey results can be time-consuming. While a program like SurveyMonkey can compile the quantitative answers, it can’t sort through text answers. You’ll need to evaluate the meaning of the answers and identify the best material yourself.

In the compliance-sensitive world of financial services, I find that people like the anonymity of online surveys. They feel free to express themselves in ways they’d shun if they needed approval from a compliance officer. This can spark colorful quotes.

When you write about what your readers say, you give them a voice. This helps you to build a sense of community with them. Reader-generated content also adds a sense of authenticity to what you write. This is especially true when you include direct quotes.

3. Run a multiple-choice poll

“I voted ‘yes’ on your poll.” Back in the days when I ran a poll in my monthly newsletter, my newsletter readers often mentioned my polls when I met them one-on-one. If you publish the poll results only in your e-newsletter, as I used to do, you give readers an incentive to subscribe. That’s always a plus.

Like the one-word-answer technique, multiple-choice polls don’t require much effort for people to answer, which boosts participation.

I often enable readers to add their own responses to the polls, rather than choosing from those I’ve listed. I’ve received some good insights from allowing them this freedom.

By the way, consider testing your poll on a member of your target audience before you release it. Your instructions or questions may not be as clear as you think. I think I’m a clear writer, but my outside readers have helped me to refine my questions for better results.

4. Start discussions on social media

Posing a question on LinkedIn or other social media is a great way to collect content. I especially like doing this on LinkedIn because all of the answers are collected in one place. Also, one person’s response often sparks another.

When a social media question inspires a lively conversation, that says that the topic is worthy of a blog post. It’s likely to be shared widely.

Career strategies for wealth managers without a book of business” is essentially a compilation of answers that LinkedIn members posted in response to a question. I quoted only LinkedIn Group members who gave me their permission since I posted my question on a members-only group. If you post on a public group, then technically you don’t need to ask permission. However, I think it’s the right thing to do, unless you explicitly warn people in your original post that you are looking for quotes.

5. Ask “What do you want to read?” at every opportunity

You can ask clients, prospects, referral sources, and social media connections “What do you want to read?” Also, What’s your opinion on that?” The people whom you ask will be flattered you asked for their opinion.

More ideas for generating financial content

By the way, for another perspective on using surveys and questions, read “3 Ways to Create Highly Valuable Blog Content” on the Social Media Examiner blog.

You can learn even more ideas for generating financial writing topics and content when you sign up for my class, “How to Write Blog Posts People Will Read: A 5-Week Writing Class for Financial Advisors.” The next session starts in February 2016.

What do you want to read?

Of course, I’d like to learn more about YOUR interests. Please leave a comment suggesting topics for future blog posts.


This post originally appeared in a slightly different form on the Wired Advisor blog, which no longer exists in its original form.

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