{"id":660,"date":"2019-11-04T08:36:25","date_gmt":"2019-11-04T08:36:25","guid":{"rendered":"https:\/\/arrocomm.com\/blog\/?p=660"},"modified":"2023-05-03T04:51:28","modified_gmt":"2023-05-03T04:51:28","slug":"dont-take-financial-jargon-for-granted-you-just-might-lose-prospective-investors","status":"publish","type":"post","link":"https:\/\/arrocomm.com\/blog\/dont-take-financial-jargon-for-granted-you-just-might-lose-prospective-investors\/","title":{"rendered":"Don\u2019t Take Financial Jargon for Granted (You just might lose prospective investors)"},"content":{"rendered":"

\"\"It\u2019s a recurring theme in the conversations we have with potential and current marketing clients: the low-hanging fruit in the ETF universe has already been plucked, so to speak. The simplest, most easy-to-understand funds offering passive, broad exposure to the overall market have already been launched, and the competitors in that space are currently locked in a \u201crace-to-the-bottom\u201d fee war. As issuers turn to increasingly niche ETFs offering exposure to more complex investment themes, investor education becomes more important than ever.<\/p>\n

Unfortunately, because so many ETF issuers and creators are too close to their products<\/a>, they can often end up leaning a bit too heavily on financial jargon<\/a>, expecting the reader or viewer to immediately be able to make sense of it. If your target audience consists entirely of sophisticated financial advisors and institutional investors, this may not necessarily be a problem, but if you\u2019re hoping to reach the wider public and educate them about your ETFs, this can be a major issue.<\/p>\n

Here’s our related guide on How to Tailor Your ETF Message According to the Audience<\/a><\/p>\n

 <\/p>\n

Don\u2019t take anything for granted<\/strong><\/p>\n

Terms that are tossed around frequently and casually in the financial world, such as \u201cfactor,\u201d \u201cweighting,\u201d \u201cmultifactor,\u201d \u201cbeta,\u201d \u201calpha,\u201d and \u201cbenchmark,\u201d may seem fundamental to asset managers, but are often beyond the grasp of typical investors, even some with ample amounts of investing experience. To get your fund\u2019s main value propositions<\/a> across effectively, it\u2019s often necessary to assemble a firm foundation by slowly stacking simpler concepts atop one another, building to more complex terms. For example, a would-be investor is unlikely to understand the benefits of a multifactor strategy if they don\u2019t know what a factor is at all. Similarly, the term \u201csmart beta\u201d is likely to evoke blank stares, even from some sophisticated investors, if they don\u2019t have a sufficient grasp of the difference between alpha, beta, and smart beta.<\/p>\n

 <\/p>\n

Investor education is an opportunity, not a barrier<\/strong><\/p>\n

The fact that investors may not at first properly grasp all of the nuances of a fund may appear on the surface to be a major setback, however this could not be further from the truth. High quality investor education\u2014whether in the form of investment cases<\/a>, animated videos<\/a>, infographics<\/a>, or whitepapers<\/a>\u2014can serve as incredibly valuable sales tools. Each piece of content has its own role to play in the sales journey of prospective investors. An animated video might introduce just the top-line value propositions and terminology to give a website visitor the key bits of knowledge they need to move onto more advanced, in-depth investor education, such as whitepapers. Keep in mind, an investor is unlikely to make an allocation to a fund without understanding how it works. Bit-by-bit, you\u2019ll be able to introduce more complex, nuanced bits of financial jargon as well, so long as you take the time to define your terms and build from simple to complex.<\/p>\n

 <\/p>\n

The bottom line<\/strong><\/p>\n

Financial jargon is the \u201cinside baseball\u201d of the financial services industry, and it can be so engrained in our ways of thinking that we rarely stop to ask ourselves whether our target audience<\/a> will even be able to understand some of the terminology we routinely throw around. By taking an educational approach and building from simple terms to more complex ones, ETF issuers will be well-positioned to reach prospective investors that may otherwise disengage as soon as they encounter jargon they don\u2019t understand.<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s a recurring theme in the conversations we have with potential and current marketing clients: the low-hanging fruit in the ETF universe has already been plucked, so to speak. The simplest, most easy-to-understand funds offering passive, broad exposure to the overall market have already been launched, and the competitors in that space are currently locked in a \u201crace-to-the-bottom\u201d fee war. As issuers turn to increasingly niche ETFs offering exposure to more complex investment themes, investor education becomes more important than ever. Unfortunately, because so many ETF issuers and creators are too close to their products, they can often end up leaning a bit too heavily on financial jargon, expecting the reader or viewer to immediately be able to make sense of it. If your target audience consists entirely of sophisticated financial advisors and institutional investors, this may not necessarily be a problem, but if you\u2019re hoping to reach the wider public and educate them about your ETFs, this can be a major issue. Here’s our related guide on How to Tailor Your ETF Message According to the Audience   Don\u2019t take anything for granted Terms that are tossed around frequently and casually in the financial world, such as \u201cfactor,\u201d \u201cweighting,\u201d…<\/p>\n","protected":false},"author":4,"featured_media":422,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59,11],"tags":[21,24,44,2,45,3,35],"class_list":["post-660","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-education","category-marketing","tag-audience","tag-education","tag-etfs","tag-finance","tag-financial-literacy","tag-marketing","tag-value-proposition"],"acf":[],"_links":{"self":[{"href":"https:\/\/arrocomm.com\/blog\/wp-json\/wp\/v2\/posts\/660","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/arrocomm.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arrocomm.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/arrocomm.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/arrocomm.com\/blog\/wp-json\/wp\/v2\/comments?post=660"}],"version-history":[{"count":4,"href":"https:\/\/arrocomm.com\/blog\/wp-json\/wp\/v2\/posts\/660\/revisions"}],"predecessor-version":[{"id":1146,"href":"https:\/\/arrocomm.com\/blog\/wp-json\/wp\/v2\/posts\/660\/revisions\/1146"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/arrocomm.com\/blog\/wp-json\/wp\/v2\/media\/422"}],"wp:attachment":[{"href":"https:\/\/arrocomm.com\/blog\/wp-json\/wp\/v2\/media?parent=660"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arrocomm.com\/blog\/wp-json\/wp\/v2\/categories?post=660"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arrocomm.com\/blog\/wp-json\/wp\/v2\/tags?post=660"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}