Practical analysis for investment professionals
13 May 2016

Good Communications: The “Undiscovered Country” of the Investment Profession

Tom Brakke, CFA

Well-known investment blogger Tom Brakke, CFA, of The Research Puzzle fame, believes that good communication is the undiscovered country when it comes to the ultimate success of the industry.

Put succinctly, he believes that investment professionals concentrate on their analytical responsibilities — and their performance results — but neglect their communication skills. Yet their ability to communicate within their firms and with their clients is often the real difference maker. To counteract this, as Brakke explained during his presentation at the 69th CFA Institute Annual Conference, he recommends that investment pros focus as much on communications performance as they do on investment performance.

As we all know, trying to eke out additional alpha from analysis is very difficult. In contrast, changing how we communicate, internally and externally, is easier to achieve, and its effects are longer lasting.

How Did We Get Here?

Research analysis as a profession has vocational baggage. Doing well requires deep research, constant critical thinking, and intensity. Yet these skills also can inhibit communication, as Brakke explained in his presentation, “The Missing Link: Effective Communication by Investment Professionals and Their Organizations.” Of finance professionals, Brakke says, “we have become insufferable know-it-alls.” We tend to tell everyone everything we know.

Remedies: Pare down what you know when communicating, both in speaking and in writing. Also, do not be afraid to say, “I don’t know.”

How We Usually Listen

It is typical in investing to pay attention to conversations in order to find a place where you can jump in, rather than to the grasp the speaker’s words. An example of what this is like for outsiders peering into our business is the following quote from a Twitter user:

“The natural tendency for many finance professionals is to treat every conversation as a competition. It’s exhausting.” — @LadyFOHF.

Sadly, this attitude often gets in the way of establishing client trust. Focus Consulting Group asked investment leaders, “Which behaviors/attitudes would best help to build a client-centric culture?” Of 10 choices, “more listening” swamped everything else.

Remedy: It isn’t what you know; it is how you communicate with others so that they understand what you know that’s powerful. Learn to listen!

Different Kinds of Communication

Take a moment to think about all of the venues in which you communicate as an investment professional. In all likelihood, you will discover that almost all of your non-analytical work is about communicating: There is the writing of research reports, of requests for proposals (RFPs), of shareholder letters, or presentations; there are one-on-one verbal conversations with investor relations, executives, and clients. Inside the firm, there are numerous group interactions and individual conversations, too. Each of these modes of communicating deserves your attention.

Next Steps

To improve both your own communications and those of your firm, Brakke recommends that you evaluate them using the following criteria:

  • Quality of communications: Is the substance of your message getting through?
  • Is your story correct, and are the data accurate?
  • Are your communications easy to understand?
  • Is everyone communicating the same messages throughout your organization? Or do those who interact with the firm receive different answers depending on who they talk with?
  • Are only the essential elements included within the communications?
  • If there is an important event, is there a quick response?
  • Are you and your firm approachable?
  • Are the communications in alignment with the audience (collaborators)?

Brakke then encourages you to ask your clients to grade you based on these criteria, too.

Tips for Improving Your Communications

Brakke offered a number of recommendations for more effective communications. Here is a summary of his advice:

  • Don’t think of audiences. Think of them instead as collaborators: for example, co-workers, clients, customers, and others outside your organization. When you shift your context in this way, you realize that you are not trying to develop a pithy sales pitch but instead are working to ensure that both parties are on the same playing field together.
  • Find the sweet spot by practicing your communications. Examples of the continuums that highlight the key issues are formal-versus-informal writing and simple-versus-complex concepts and language. Investment professionals do well on the former but not so well on the latter. Last, it is important to juggle the appropriate positioning for your ideas. Most finance pros do this well.
  • Avoid jargon.
  • Make your writing a narrative to improve its readability.
  • Allow for white space. Said another way: Do not drop every single bit of data into as small a space as possible. It is important that your written communications be easy on the eyes.
  • Be concise. You may be afraid of leaving something out, but leaving room for your collaborators to think of questions encourages their engagement.
  • Avoid weak cut-and-paste graphs and tables. Make sure that these components contribute to an easily followed story.
  • Don’t get lost in the numbers. Don’t believe that “performance speaks for itself.”
  • Have a clear point of view. Readers and listeners should know where you stand on the issues that are important to you and to them.
  • Don’t read your slides or text when presenting.
  • Talk with the audience, not at the audience.
  • Practice, practice, practice.
  • Set goals to improve your communications.
  • Plan to improve and evaluate your progress.

This article originally appeared on the 69th CFA Institute Annual Conference blog.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Photo courtesy of W. Scott Mitchell

About the Author(s)
Jason Voss, CFA

Jason Voss, CFA, tirelessly focuses on improving the ability of investors to better serve end clients. He is the author of the Foreword Reviews Business Book of the Year Finalist, The Intuitive Investor and the CEO of Active Investment Management (AIM) Consulting. Voss also sub-contracts for the well known firm, Focus Consulting Group. Previously, he was a portfolio manager at Davis Selected Advisers, L.P., where he co-managed the Davis Appreciation and Income Fund to noteworthy returns. Voss holds a BA in economics and an MBA in finance and accounting from the University of Colorado.

Ethics Statement

My statement of ethics is very simple, really: I treat others as I would like to be treated. In my opinion, all systems of ethics distill to this simple statement. If you believe I have deviated from this standard, I would love to hear from you: [email protected]

5 thoughts on “Good Communications: The “Undiscovered Country” of the Investment Profession”

  1. This is wonderful, I have been missing a lot. Thanks much CFA Institute.

    1. Hello!

      You are entirely welcome. Thank you for taking the time to comment.

      Yours, in service,


  2. Maryam says:

    Great article, thanks Jason.

    It really made me think. Yes, communication is so important and everything here points to your responsibilities and effective methods in getting it right.

    But everybody can do this. Every wealth management company, bank, school, medical or legal practice can say: ‘Yeah, we are experts at communicating. Check out what we do, how we do it and see how much better we are than those other guys!’

    There’s a good term for this:
    Lip service.

    Moving lips mean nothing unless we CONNECT with others (not necessarily with their lips, but that’s cool too). Communicating is pointless unless you connect and engage with others, and that’s a more mysterious art.

    Maybe it goes back to the old market roots of trading.

    I live in East London, I can see the city’s financial landmarks from my doorstep. There are the best and oldest street markets here in my part of town and a long tradition of street market traders moving to the city and becoming slick wide boys in banking and finance. They brought their swag with them. The loudest voice in the street market sells more, no? I hear competing shouts in my local and rather famous street market ‘GET your JUICIEST toms, here!’ ‘POUND A BOWL!’

    No. I look at the fruit and enjoy the banter from these guys. ‘Hello, darling, come and give these coconuts a shake!’ Naughty but engaging! The key is to connect with your clients and humans do this best in a fun, relaxed environment with a little help from humour, art and music. Of course professionals have to have an air of seriousness about them, but we all know the best professionals are the ones that can put us at ease and have a way of connecting with us on a level that inspires trust. Confidence in one’s knowledge and limitations allows for honest engagement. Real connection gives a lot of freedom to communicate with compassion and a little light heartedness about very serious issues.

    1. Hello Maryam,

      This ranks as one of my favorite responses to something I have written before. Here, almost all of the credit for the content goes to my peer, Tom Brakke, whose presentation I was privileged to attend and cover. If you do not follow him already, you should.

      Again, thank you for the impassioned comments!


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