Creating an effective client comms strategy under consumer duty

As ever, the rules can be somewhat subjective, but a detailed assessment of all outbound correspondence should identify potential areas of concern that lead to development and rectification work or the introduction of more effective monitoring to ensure the rules are being met.

Earlier this year, we surveyed more than 100 investors with our Consumers and Financial Communications survey; 30 per cent of respondents said they read “very little” of their financial communications, while another 16 per cent said they ignore them altogether. 

The survey also found that the top reasons as to why consumers are discouraged from reading financial communications are:

• Communications are too long (64.4 per cent).
• Do not always have the time (50.5 per cent).
• Too much jargon (45.5 per cent).
• There is no immediately clear action in the communication (45.5 per cent).
• Lack of volition: “I don’t want to read it or feel I need to” (30.7 per cent).
• Not written in plain English (27.7 per cent).

This severe disconnect suggests a great deal of room for improvement remains. So, with this in mind, here is a checklist to help firms ensure their client communications are as effective as possible.

1. Is the communication comprehensible?

Nearly half of the respondents to our investor communications survey said they find financial communications too complicated.

Why not include a clear explanation of the risks a reader could face if they choose to ignore the document?

TIP: Documents should be written by an individual with a thorough understanding of their target market. Where possible, technical terms should also be avoided or thoroughly explained to ensure readers comprehend what they are reading.

2. Is it clear what the reader has to do?

Similarly, nearly 50 per cent of our respondents also said they ignore communications because no clear action or response is immediately required of them.

TIP: Key areas of a document requiring some decision from the readers should be highlighted and accompanied by a strong call-to-action. To double down, why not include a clear explanation of the risks a reader could face if they choose to ignore the document?

3. Is it personalised?

Personalised communications create a stronger connection by addressing a customer’s specific needs and interests.

TIP: Include data points such as a client’s name, their recent transactions, and tailored product/service recommendations. Segmentation can also be used to create targeted messages that resonate with unique interests and goals across similar customers.

4. Is it the right length?

Nearly two-thirds of our respondents said they were put off by the length of communications. That is concerning when the length of a document can be linked directly to its importance.