Lessons Learned

With over three decades helping asset management firms grow in the institutional investor market, we have learned some invaluable lessons on how to maximize an investment firm’s ability to endure.

1. Be client-centric.

While putting clients’ interests first seems like a given, there are firms recognized more as asset gatherers than as asset managers. Or firms that are more focused on quarterly revenues, expenses and profits than on client outcomes. If you are truly client-centric, you will build a culture that always puts client interests first. You will employ experienced professionals who care about their clients across all areas. You will control the growth trajectory of the firm overall and for each strategy to ensure your clients benefit. Your professionals will listen to, engage with and serve every client of the firm. You will stay deeply entrenched in understanding client needs as they evolve. You will have competitive and transparent fees.

2. Vary your client base.

If all your clients are in one region or in one type of investor category, your risk of loss is higher should the client base become unhappy with your firm. Investors share information with each other. If one public fund client fires you, it will become known fairly quickly. If two or three fire you, you may face a mass exodus.

3. Diversify your investment offerings appropriately.

If you have too few strategies, or are a niche manager you risk your approach becoming out of favor, or performing poorly relative to benchmarks or competitors, and having no growth. Conversely, if you have too many offerings, investors may question what you are good at, or misunderstand what you are offering. Be strategic in developing your plan for growth.

4. Have sufficient capital for a three- to five-year runway.

If you are a new firm, assume it will take longer than you expect to achieve profitability. The barriers to entry have risen. Increased compliance, more stringent regulations, essential technologies, cybersecurity and relentless competition, along with fee pressures and high compensation demands, have made it much tougher for a new firm to launch, much less ascend. As a result, due diligence on an investment company’s ownership, compensation, financial strength and other business issues has deepened.

5. Define incentives that align interests with those of clients.

Ownership structure and compensation programs can make or break a firm long term. Incentives must be in place to attract and reward talent who in turn appreciate and care about achieving client goals.

6. Define a strategic marketing and sales plan, and implement with experts.

Still common in our industry are firms where marketing and sales professionals are treated like second-class citizens. A strong brand and effective messaging are keys to success. Developing a well-crafted plan to direct and focus your marketing and sales resources will give you an important competitive advantage. Skilled sales, consultant and client service professionals who understand the markets and client needs, and who know how to listen, marshal resources and solve problems are essential.

7. Know and articulate your strengths and distinctions.

The market is smart, skeptical and rich with choices. Yes, investors need to know what you do, but more importantly, how are you different and stronger than your competition? Does your value promise extend beyond just performance? In what ways? How can investors benefit more from working with you than others? Why can they trust you, and have confidence in the future of your relationship with them?

“Try not to become a man of success. Rather become a man of value.” ~ Albert Einstein

Any lessons learned that you wish to convey? Please comment below and share this article if you found it helpful. Stay engaged by following us!


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Jackie Charnley, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Jackie serves on the ICMA-RC Board, a not-for-profit company serving the financial needs of over one million public employees. She was also a founding board member of PAICR (Professional Association for Investment Communications Resources).

Seven Lessons Learned from the Board Room

A not-for-profit dedicated to the financial well-being of well over a million public employees, ICMA-RC is a mission-driven organization. The ICMA-RC Board is one of which I am particularly proud to serve. I have served on the ICMA-RC Board for seven years, chairing the Investment Committee for the last four years and serving on the Nominating Committee as well.

What have I learned?

  1. Succession matters. One of the most important decisions you will need to make at some point is to replace the CEO or President. Be prepared. Discuss succession among the board members. Spend time with the internal candidates, and ask them questions. Ask them what they feel they would need to assume a leadership role. Know what executive recruiter you will use if necessary. Assess the current CEO or President. What other qualities would be useful for the enterprise to succeed? Discuss diversity. Take your time. Don’t make a decision just to make a decision.
  2. Avoid complacency. The competitive landscape is always changing. Study and be thinking about what industry, client and competitor changes may mean to you and the organization you serve. One thing you can depend on – competitors will never stand still. You need to know the company’s value proposition and whether it has the power to stand the test of time. Invite external experts to speak to you and your board members. Engage the leadership team in discussions of what is going well and what keeps them up at night.
  3. Understand the present, but spend most of your time on the future. What will the next year, three years, five years, or even twenty years look like? Understand what the company does. How do the employees feel? What will be the big issues going forward? How will the company attract talent? Who will be your future competitors? What changes are the clients/buyers undergoing that need to be addressed? Challenge the CEO/President/leadership team on what they envision for the future.
  4. Take cybersecurity seriously. Take all risks seriously, but take cybersecurity especially seriously. Your due diligence can make the difference in the company’s reputation. Ask the dumb questions (although there is no such thing as a dumb question). Again, call on experts to help you become more knowledgeable and understand the most likely risks.
  5. Commit to continuing education. Preferably attend educational events with other board members so that you can talk about what you have learned in context of your board and organization. You will discover that you can always learn something new. And you will realize that there are many different solutions to almost any issue. It is amazing what different board members have experienced. Dialogue and ongoing learning are key to capitalizing on others’ experiences.
  6. Think outside of the box. If you are a health company, look at a toy company. If you are an asset management firm, assess a film company. If you are a public entity, look to the private sector. What are they doing that might be useful for your enterprise? Do you have a chief of innovation? When was the last time that management came to the board with an innovative idea, or vice versa? How successfully was that idea implemented?
  7. Align compensation with desired behaviors. The lessons learned from Wells Fargo were sobering. The bank’s revenue goals were unrealistic and ultimately motivated professionals to have sales take precedence over fulfilling client needs. Never take client retention for granted. Be strategic and reward your professionals for keeping clients as much as for attracting them.

The beauty of serving on a board is how much you learn from others who are in management or who also serve on a board. It is joyful work.

“I don’t know what your destiny will be, but one thing I know: the only ones among you who will be really happy are those who have sought and found how to serve.”

~ Albert Schweitzer

Have you ever served on a board? Any lessons you wish to convey? Please comment below and share this article if you found it helpful. Stay engaged by following us!


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Jackie Charnley, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Jackie serves on the ICMA-RC Board, a not-for-profit company serving the financial needs of over one million public employees. She was also a founding board member of PAICR (Professional Association for Investment Communications Resources).

Institutional Investment Sales Professionals – Still Facing a Whole New World

“Knowledge must continually be renewed by ceaseless effort, if it is not to be lost. It resembles a statue of marble which stands in the desert and is continually threatened with burial by the shifting sand. The hands of service must ever be at work, in order that the marble continue to lastingly shine in the sun. To these serving hands, mine shall also belong.”

~ Albert Einstein, 1950

Precipitated in large part by the Financial Crisis of 2008, the role and expertise required of the institutional sales professional have had to evolve – from benchmark-centered product sales to a consultative approach that focuses on client needs and outcomes. After the financial crisis, the smoke of scorched markets cleared to reveal a new, more complex world for fiduciaries and the managers who serve them. For many, the collective haunt of negative or single-digit returns, illiquidity when liquidity was needed most, and higher correlations across asset classes gave rise to a specter of shortfalls in meeting objectives and greater challenges in closing funding gaps.

The needs of the institutional investor vary – encompassing absolute returns, alpha, relevant diversification, liquidity, volatility reduction, income, reduced funding gaps, asset-liability matching or inflation protection. To address specific needs, institutional investors need to work with managers who are experts on capital markets worldwide, understand correlations and risk exposures, and who can offer or create solutions.

“Buckets and Boxes – Let’s Fill Them!”

Prior to the financial crisis, institutional sales professionals predominantly represented products – such as Large Cap Value, Small Cap Equity, International Equity, Fixed Income selections – to institutional investors who had mapped out fairly rigid asset allocation buckets and style boxes to be filled with defined investment products. For the most part, consultants and institutional investors knew exactly what buckets and boxes they were looking to fill, and would meet with those institutional sales professionals who had the products to fill the buckets.

Benchmarks were well defined. Relative performance to benchmarks and peers drove business. Agendas were straightforward. Managers simply let the prospect know which bucket or box they inhabited, how they fared compared to other managers in those buckets or boxes, and how they would be able to repeat their investment successes. Sales and communication processes were nearly formulaic. The Four Ps dominated: Philosophy, People, Process and Performance. If the “product” managers didn’t prove to be “good” (outperforming benchmarks and peers), they were fired and replaced by “better” product managers in those buckets and boxes.

Many managers’ products, however, did not fit in the buckets or boxes. Some, in order to grow assets, either forced their products to fit or launched products that did. Others left the confines of the traditional institutional investment world and moved into the more receptive realms of Endowments, Foundations or High Net Worth. A few pioneers revolutionized communications with the institutional investor market – identifying what they perceived to be the real needs of institutional investors, and communicating why investment offerings outside traditional buckets and boxes may be better solutions. This generally proved to be a hard sell.

“Needs and Solutions – Let’s Meet Them!”

Once the smoke of the financial crisis cleared, revealing harsh new realities, institutional investors started demanding more. Standard 60:40 asset allocations and benchmark-investing were no longer right for all investors. Almost overnight, investors and fiduciaries began shedding traditional asset allocations and style-box methods to explore what was really needed to achieve successful long-term investment outcomes.

Simultaneously, globalization led to expanding investment markets, innovation created new instruments and new markets, and the inspired vision of those with proven investment prowess brought inventive solutions to the forefront. The traditional model of selling an investment firm’s history, AUM size, products and the Four Ps became less effective. The challenge became how to position investment offerings in context of dynamic, newly appreciated needs and goals of institutional investors. Thus, the evolution of institutional sales professionals from “product sales” to “consultative sales.”

“The Hands of Service”

What does “consultative sales” mean? Many professionals were already successful at the consultative sales approach. The attributes of the evolved institutional sales professional include the following:

  • Expert investment knowledge. An MBA, CFA and/or minimum ten years in-depth investment industry experience are mandatory, as evidenced by the demand for former consultants and/or product specialists to serve as client service or sales professionals. Expertise must expand beyond a single style or asset class, and sales professionals now must demonstrate a strong grasp both of the risks institutional investors face, and of the diverse competing solutions that are effective in meeting long-term institutional investor needs. The sales professional needs to be conversant on correlations, liquidity, risk budgets, leverage, hedging, different financial instruments and leading-edge solutions. Remember, time is limited, information overwhelming and insights valued.
  • Strong probing and listening skills. A client service or sales professional must be able to ask the right open-ended questions to elicit objectives, preferences, objections, concerns, biases and opportunities. Unless specifically invited to do so, walking in and delivering a product presentation at the first meeting will limit a firm’s capability to one category in a prospect’s mind. The ability to ask the right questions at the right time, and respond appropriately, demonstrates to the client, prospect or consultant the value of working together. Strong listening skills earn respect and are also helpful in qualifying clients and prospects.
  • Empathy. A sales professional must know what actions would be most worthwhile for the buyer and when they should be offered. Attempting to sell a product prematurely or asking for the wrong actions frequently and regrettably result in no more meetings.
  • Insightful, personalized follow-through. There should always be follow-through actions. It is not enough to send a rote thank-you letter with performance information attached. It is not enough to send a social thank-you note mentioning kids, hobbies or vacation spots. What challenges or concerns are absorbing the time of the prospect or client? What would help that individual to tackle his or her challenges? A consultative approach means you are there to help. How can you help?
  • Representation of the client/prospect/consultant within the firm. In today’s highly competitive market, everyone needs to elevate their skills in communicating with clients, prospects and consultants. Consultative institutional sales professionals effectively convey and disseminate within their firms the priorities and concerns they learn from clients, consultants and prospects. Investment professionals who are well versed in the prospect’s needs and biases can advance prior conversations by bringing highly focused, relevant content to that client or prospect when they meet.

As Einstein challenged in 1950, “Knowledge must continually be renewed by ceaseless effort…” Change in our industry is continuing rapidly. It’s an exciting time to be a part of the institutional investment world, but not a time to stand still. It is a time to learn, to develop, to evolve. It is a time to keep our hands of service hard at work.

Tell us how you and your firm have evolved. Please comment below and share this article if you found it helpful. Stay engaged by following us!


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Jackie Charnley, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Jackie serves on the ICMA-RC Board, a not-for-profit company serving the financial needs of over one million public employees. She was also a founding board member of PAICR (Professional Association for Investment Communications Resources).

Value Creation for Smaller Asset Management Firms

Your firm has choppy performance, you have lost some clients, and sales are stagnant. What do you do?

The three important areas to question in this situation are centered on Investments, Client Service, and Sales Structure/Strategy. You need to be tough, and you need to ask the right questions in each area. You need to evaluate the answers in context of all three areas. Otherwise, your firm will continue to flounder, and you will be unable to define a relevant strategy.

We had a client who was in the unenviable position of possibly losing a $1 billion client. The team asked themselves some tough questions to save the relationship. Those questions are below. The firm was successful and carried out the “save the client” initiative with conviction, authority and authenticity.

Investments

First, take a hard look at the strategy’s performance.

  • Do you still have conviction in your philosophy, process and disciplines?
  • Do you understand from where the underperformance is coming and why?
  • Is your approach robust enough? Will you be able to continue to add value in the future?
  • When was the last time you analyzed the key drivers of performance? What are you doing about addressing the unknown risks? Can you isolate and improve those specific elements that are causing the underperformance? Can you reinforce the areas that are performing well?

Then, expand your analysis to include all areas that affect the strategy – from the systems to the people.

  • Your universe – is it sufficiently large? Are you getting enough of the right ideas? Are you getting to them fast enough?
  • Your approach to research and to screening – are your criteria and/or screens hurting or helping? Are you getting the information you need in order to make timely, high- conviction decisions? Are your relationships with company managements, competitors and providers productive enough?
  • Your team and how everyone works together – are communications frequent, invigorating and value-added? Is your idea exchange healthy? Are the recommendations solid? Is any area under-resourced?
  • How effective are your approaches to volatility, risk management and the benchmarks?
  • What is the value added from your trading desk?
  • Do you have the right investment strategies? Too many? Too few?

Finally, ask your investment professionals what they think.

  • What areas do the portfolio managers believe can be improved?
  • What areas do the research analysts believe can be improved?

Client Service

You need to dive deep into client relationships and confirm how you are perceived.

  • Do you feel truly confident that you understand the reasons for the client losses?
  • How much attention are you paying to clients?
  • Should you conduct a survey? Should you retain an independent firm to evaluate the relationships?
  • Are your clients eager to meet with you, and do they seek your perspectives on the markets or on world events?
  • Do they initiate communications with you? Do they respond to any of your written commentaries?
  • What do they feel about the quality of the people with whom they are interfacing? What do they feel about your firm? Are your clients confident in your firm?
  • Are your client service professionals equally as confident in their relationships with clients and with internal team members?
  • Are they positive on your firm and how it is being led? Do they have conviction in the firm’s investment offerings?
  • How do they think client service could be improved?

Distribution

Your sales strategy needs to be well-defined and measured.

  • Do you understand your competitive position by strategy, by target market, by consultant? Is there a well-defined marketing plan that focuses resources appropriately?
  • Are you diversified enough? In your offerings? In your types of clients? Geographic diversification?
  • Are the optimal target markets for your strategies defined?
  • Do you have the right strategic partners for distribution?
  • Are you developing productive relationships with the consultants in your target markets? Are you gaining approvals?
  • Are your key messages strong and engaging? Are your materials fresh and clear? If not, why not?

Connect with the consultant community to understand why your competitive position has tumbled. Interact with your prospects and peers. Ask questions. Ask for feedback.

Conclusion

All three areas – Investments, Client Service, and Sales Structure/Strategy – are part of one organic being. Are the three well-integrated, and do the different entities work well together? Are they on message? Is there a consistent, relevant brand that you convey, both internally and externally? Assess if there are areas where innovation and technology can help. Finally, at the end of the day, you have to ask the toughest questions of all. Do you have the right structure, the right people and the right leadership? Once you ask the questions and you have the answers, you can re-build, re-invigorate and re-start.

We would like to hear how you successfully re-invigorated your firm. Engage in conversation with us! Please comment below and share this article if you found it helpful. Stay engaged by following us!


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Jackie Charnley, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Jackie serves on the ICMA-RC Board, a not-for-profit company serving the financial needs of over one million public employees. She was also a founding board member of PAICR (Professional Association for Investment Communications Resources).

Three Keys to Excellence

People often feel as though they could never be inspiring speakers. They sometimes conclude that they are introverted; therefore, communications will be naturally challenging for them. Public speaking and communicating, however, are both skills that are learned.

Most of us have impressions of Winston Churchill as a powerful and gifted orator, however, it was not always so. Winston did poorly in school, was chubby and spoke with a lisp when he was young. He also stuttered. His own father, a brilliant scholar and political leader, considered Winston a disappointment. But when Winston was 12 years old, he attended a private boarding school, and there he became enamored with literature. The more he read, the more his world expanded, and he started to thrive. As he grew older, he began to develop his public speaking skills, and overcame his lisp and stuttering. The rest is history.

Some of the individuals we have coached to improve their communications have surpassed their own expectations, and, as Winston did with his father, exceeded our expectations as well. What is the secret to their success?

1. Mindfulness

Many people are unaware of how they communicate. You may have friends who talk non-stop with run-on sentences, use filler words such as “like” or “you know,” or ask a question and then never wait to hear the answer. While Winston’s lisp or stuttering may have been more noticeable than these bad habits, all communication habits bear assessing. If you are uncertain as to how effectively you communicate, ask family members or your peers at work. Record yourself speaking, then listen for pace, modulation, verbal tics, filler words, and overly casual language.

2. Commitment

Becoming aware of your strengths and of areas to improve is just the start. After you’ve become mindful, develop a plan for what and how to improve. You need to commit both thought and time. Few people are able to change their communication style overnight. We recommend establishing three priorities. By setting three priorities and working on each of them, you will focus on your biggest issues in a manageable way.

For example, if you speak with a lisp, mumble or have an accent, you can commit to enunciation exercises, a sample of which is below. Stand in front of a mirror, and exaggerate your words while you perform these exercises.

  • Open and close your mouth easily as you repeat these sounds: Fah Fah Fah Fah Blah Blah
  • To loosen your jaw, repeat these sounds: Sah Kah She Fah Rah, Pah Kah She Fah Rah, Wah Kah She Fah Rah, Baj Kah She Fah Rah, Dah Kah She Fah Rah
  • To loosen your lips, repeat these letters: www www www bbb bbb bbb wbw wbw wbw
  • For a combination of jaw and lip loosening, repeat these letters: lll ldl www ldl wlwd
  • Phrases for precise articulation: “The tip of the tongue, the teeth and the lips”, “Lah lee loo lee. Zip e do da”, “Repetition, repetition, repetition”, “We’ll weather the weather whatever the weather whether we like it or not”

Here’s a famous tongue twister from the opera, The Mikado by Gilbert and Sullivan. (Imagine having to sing this on stage in front of an audience!)

To sit in solemn silence in a dull, dark dock, In a pestilential prison, with a life-long lock, Awaiting the sensation of a short, sharp shock, From a cheap and chippy chopper on a big black block! To sit in solemn silence in a dull, dark dock, In a pestilential prison, with a life-long lock, Awaiting the sensation of a short, sharp shock, From a cheap and chippy chopper on a big black block! A dull, dark dock, a life-long lock, A short, sharp shock, a big black block! To sit in solemn silence in a pestilential prison, And awaiting the sensation, From a cheap and chippy chopper on a big black block!

(Source: Mount Holyoke College)

3. Practice

Regular practice or actual rehearsals – which encompass both content and delivery – enhance communication skills. Even naturally gifted speakers fall into some bad habits or become lazy. By practicing and rehearsing regularly, you will gain greater command of your content. You will articulate, modulate and pause using your voice, just as if you were singing or dancing. Your posture, eye contact, voice, and delivery will all be improved. With increased confidence, you will be able to engage more fully with your audience.

“To improve is to change; to be perfect is to change often.” ~ Winston Churchill

Do you have an insight on enhancing your communication style to offer? Please comment below and share this article if you found it helpful. Stay engaged by following us!


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Jackie Charnley, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Jackie serves on the ICMA-RC Board, a not-for-profit company serving the financial needs of over one million public employees. She was also a founding board member of PAICR (Professional Association for Investment Communications Resources).

National Dance Competition – Is Past Performance A Guarantee of Future Success?

Recently, while working on messaging and investment process definition for a global equity strategy for a New York-based manager, we were staying at the Sheraton Times Square. The hotel was the site of the 2016 National Season Finale for the New York City Dance Alliance. The grand lobby was filled with aspiring dancers from ages 5 to 15. Little girls and teen-age girls were sprinkled everywhere, costumed with false eyelashes, lipstick, face powder and rouge, hair curled and sprayed, bedecked with ribbons and jewels. Sparkling lavender, red, turquoise, gold, silver and pink spandex outfits, and shiny black patent leather dancing shoes adorned all the contestants, boys and girls. I couldn’t help but wonder what did all the make-up, hair embellishments and gilded spandex have to do with dancing? Is it a competition for best costume or best dancing? When I looked up the winners listed by different age groups, no details were provided. I wondered also if winning these competitions were indicative of future success as dancers.

Just as I wonder what all the full-page ads in our asset management industry publications (especially cover-page ads), showing Morningstar ratings, or composite and benchmark returns, have to do with institutional asset management? With every ad showing performance, there is the familiar disclaimer in bold text – Past Performance Is No Guarantee of Future Results. Studies completed by Vanguard and others have concluded that Morningstar ratings offer little insight about expected future relative performance. If past performance and ratings provide unreliable direction on future success, why do we continue to spend so much time showcasing and evaluating historical returns relative to benchmarks and peers?

Why not focus instead on what does matter? I found Gretchen Tai’s article, “HP Lays the Foundation for a New Investment Model,” in the June 2016 issue of Institutional Investor to offer a rational alternative to meeting long-term future liabilities. As former CIO at Hewlett-Packard’s pension plan team from 2010 until her recent retirement, Gretchen had an instructive story to share. With the same skepticism toward forecasting expected returns, volatility and correlations across asset classes as I feel about selecting managers based on benchmark or peer rankings, Gretchen and her team at HP developed a new model for asset allocation, distinct from the traditional mean-variance optimization and from the “endowment” model, evolved from David Swensen’s Yale University model. The goal was to achieve better long-term results relevant to HP’s needs based on more attention and understanding of risk, responsiveness to markets and dynamic rebalancing. Downside protection and cost controls were key elements of the success of the model. She credited former CIO, Ken Frier, and his team, with much of the original innovation, focusing on “We will take risk for the plan when we have to, and we will take risk where the payoff is best. If we don’t need the risk or if the reward is not worth the risk, then we won’t take it.” Check out the full article in the June 2016 issue of Institutional Investor.

I hope that the awards for the dancers are more indicative of future success than benchmark and peer rankings are for managers. I also hope that we as an industry continue to make inroads in understanding how to achieve success for our constituents. Their future and our own future depends on it.

What do you think? How can we ensure deeper understanding of determining the best investment solutions for varying retirement needs? Please share and comment below.

Stay engaged by following us.


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Jackie Charnley, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Jackie serves on the ICMA-RC Board, a not-for-profit company serving the financial needs of over one million public employees. She was also a founding board member of PAICR (Professional Association for Investment Communications Resources).

Vocabulary Can Rocket or Crash Communications

We know the “60:30:10 Communication Rule” – 60% of communication success is body language, 30% is tone of voice, and 10% is made up of the words you use. But that 10% can make a difference between a rapt and attentive audience, and a drowsy, bored, yawning, texting audience. And that 10% is more than just how important your story or message is. Vocabulary counts. Working with a variety of communicators, with diverse types and levels of knowledge, ages young and old, across a world of accents, and with high, low, loud or nasally voices, we discovered that no matter the speaker, variety and thoughtfulness in vocabulary choices enrich communications. A lush vocabulary increases a speaker’s chances of achieving Authenticity, Brevity and Clarity.

A lazy vocabulary, on the other hand, can make a presenter appear inauthentic. One of the most popular words currently in emails, hello’s, good-bye’s and answers to questions is GREAT. “Have a great day.” “Great to hear from you.” “Hope you have a great week.” Great also appears as the word of choice when responding to answers to questions. For example, we observed an institutional client service professional ask a prospect, “What are your biggest challenges in overseeing your retirement plan assets?” The plan sponsor was brief in his answer: “Our long-term liabilities.” Her response? “Great.” What? Did she really just say that? She then jumped right into what she wanted to say next. Great fails miserably at conveying concern and empathy, and is a weak descriptor.

  • “We have a great team.”
  • “We have great conviction in high-positioned managers.”
  • “We have a great partnership structure, and, uh, it’s really just a good group focused on generating returns.”

Replace with, “Our partnership structure motivates and rewards us to have the strongest talent and experience possible focused on our clients’ successes.”

Shun adjectives that are too general (great, good, fine).

  • What makes the team great?
  • What makes the structure great?
  • What makes the group good?
  • What makes your conviction great?

Tape yourself giving a presentation or answering questions sometime. Count how many times you use great, good, or fine. When you are ready to break your “great” habit, substitute words are:

  • Productive
  • Fruitful
  • Positive
  • Mutually beneficial
  • Exciting (or excited)
  • Invigorating
  • Stimulating
  • Motivating
  • Original
  • Insightful
  • Grand
  • Excellent
  • Helpful
  • Impressive
  • Notable
  • Intense
  • Pertinent
  • Advantageous
  • Effective
  • Important
  • Significant
  • Memorable
  • Valuable
  • Crucial
  • Serious
  • Relevant
  • Appreciated
  • Constructive
  • Creative
  • Worthwhile

More on achieving authenticity. Passion is good, but too much of a good thing can be bad. Here’s how a portfolio manager recently described his process: “We have a tremendous team of absolutely brilliant people, and we all love to work together on the portfolio. It’s amazing.” Superlatives can overwhelm a listener. Superlatives can feel like hyperbole and also fail to tell you all that much. Here is an example of a research analyst sharing his analysis of a stock: “I don’t like the management at the industry leader, but we love how the competitors are doing. And another company I hate is…” Do clients care if you like, dislike hate or love a stock? Overusing superlatives or emotional words undermines authenticity.

A misguided vocabulary can also cloud a message. Phrasing what you say in the negative fails to convey what you do do. “We don’t market time.” “We don’t usescreens.” “You won’t see us investing in those types of companies.” “I don’t wantyou to think that I…” Politicians use negative framing all the time. “We can’t solve any of these problems by relying on the politicians who created the problems themselves. We’ll never be able to fix a rigged system by counting on the same people who have rigged it in the first place.” These statements convolute the message. How will the problems be solved? Phrase your points in the positive.

Vocabulary can elevate or diminish credibility of younger professionals. A common mistake that shouts youth and inexperience is the use of too casual language. Words and phrases such as: Yeah, You guys, Stuff, Kind of, or No problem should be trashed.

  • Yeah, she knows her stuff inside and out.”
  • You guys would be an important client for us.”
  • “The global stuff is kind of an advantage.”

Another vocabulary “no, no?” Tentative language is a turn-off. My business partner and I were flying into O’Hare when our plane started to experience bumpy weather. As our plane was tossing and turning on its descent, we saw rain and lightning outside the window. The pilot came on the loudspeaker and said, “We’re going to attempt an instrument landing.” Instill confidence? No, he did not.

  • “We will try to service your account well.”
  • “I think we do a fairly good job of managing portfolios.”
  • “We kind of understand what management’s strategy is.”

Replace tentative language with active verbs. Be direct. Be confident. Demonstrate your conviction.

Remember, words may be just 10% when communicating, but words can make your message mighty. Learn to cherish and build your vocabulary. The return in your lifetime will be tenfold.

“Loving your language means a command of its vocabulary beyond the level of the everyday.” – John McWhorter


Charnley & Røstvold, Inc., a preeminent marketing consulting firm to asset management firms ranging in size from start-up firms to some of the world’s largest investment firms with over $1 trillion under management. Charnley & Røstvold helps clients with competitive positioning, marketing strategies, key messages, presentation refinements, communications and sales training, consultant relations and client service programs.

Jackie Charnley, co-founder of Charnley & Røstvold, Inc., is a popular industry speaker and author. Jackie serves on the ICMA-RC Board, a not-for-profit company serving the financial needs of over one million public employees. She was also a founding board member of PAICR (Professional Association for Investment Communications Resources).