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Asset Management Communications Blog

A Resource for Investment Management Marketing & Communications

4 Steps to a Better Quarterly Letter

April 07, 2016

investment_management_client_communications.jpgIn the never-ending quest for differentiation, one of the best ways investment managers can demonstrate their uniqueness is in the quarterly client letter.

It is a timely issue, as this is one of the four times a year when investment managers are more or less forced to follow up with their clients and explain themselves (better or worse).

For even the most reticent, misanthropic firms, the quarterly client letter can do more to differentiate than any other single business practice.

With that in mind, quarterly investment management client communications can be greatly enhanced by adhering to these four basic strategies.

Write for Humans
In other words, don’t approach the client letter as though it is your master’s thesis in portfolio management theory. These are real investments made on behalf of real people (or on behalf of real people working on behalf of other real people), so understand there is an undeniable emotional component for which investment management client communications must account.

And that emotional connection extends to the real-world relationship as well. One of the truest (though hackneyed) clichés is that people don’t do business with companies; they do business with other people. As such, the most important way you can keep your clients satisfied is by talking to them, not like an algorithm, but as a person.

In that vein…

Avoid a logic-based, academic tone.
In Star Trek, there’s a reason why McCoy was always so infuriated with Spock – robotic dispassion can serve as an anchor during turbulent times, but empathy with your audience is often just as important, and makes you more relatable.



One of the biggest challenges to creating effective investment management client communications is that most people establish their ideas about writing during their undergraduate and graduate years; in other words, the last time they were asked to write regularly and extensively.

But writing is about more than the precise expression of a thought, or defense of an argument; it is also a function of how effectively ideas are communicated to a specific audience. Know that just because word choice is meticulous, syntax is correct, and punctuation is impeccable doesn’t mean that something is well-written.

In other words, context matters. And the context here is one in which an asset manager is trying to capture the attention of an audience that is either distracted, impatient, disinterested, or some combination thereof.

Do clients and prospects want to know what happened and why? Sure, but they will settle for the “what” if the "why" is dry, boring, and uninteresting.

So how can investment managers solve this conundrum? Answer real questions. Solve real problems. Show they understand. Earn their audience's attention.

Write with the specific intention of wanting to be read.

If your prospects and clients routinely skip your content, refusing to engage because it’s boring, an important part of the value proposition which differentiates your firm is lost.

And no investment manager wants a stable of clients only interested in bottom-line performance.

Realize that what you want to say doesn’t always dovetail with what your audience wants to hear.
Every asset manager says they view their clients as partners, but then in the quarterly letter, they talk about their performance, their portfolios, etc., rather than the performance of a client's portfolio. It’s a subtle difference, but one which should suggest a partnership, rather than a service.

Firm-centric messaging such as this can also be found when quarterly letters are filled with long ruminations on the markets and economy and how it affected performance.

Really, unless a firm’s investment philosophy and processes are explicitly tied to these macro concerns, I don’t get the sense clients particularly care.

Why? Because there is absolutely no shortage of available market and economic commentary.

Commentary and analysis are a dime a dozen and can be found in sources with much greater authority than most asset management firms. Spending time and effort analyzing the economy and markets end up being an exercise in justification, not explanation.

Here’s what I mean in a typical example:

“Despite a great deal of price volatility, the equity markets were essentially unchanged. The total return (price change plus reinvested dividends) for the S&P 500 rose +1.4% for the quarter and the Dow Jones Industrial Average increased just +0.2%. The total return for the S&P 500 would have been negative without our top three total return contributors.”

A better approach?

“We are well-aware that most of our clients invest with us for specific reasons. And there were several developments this quarter that affected the outcomes our clients have come to expect. We’d like to take a look at a few of these developments and discuss what it means for you, our clients, going forward.”

The first piece says:

“We are going to tell you what happened and what we believe it means for us.”

The second?

“You invest with us for a reason, and so we’d like to explain what happened, why it happened, and what it means for you.”

Unfortunately, too often quarterly letters are nothing more than a dry recap, with jargon-laced tie-ins to portfolio performance, and perhaps a smattering of portfolio moves that were made over the course of the quarter.

This is a trap best avoided.


Client communications are only one part of the equation. Wondering if your website content is as good as it can be?

DQCOMM Website Review CTA


Remember: All Content is Digital
In today’s investment management client communications environment, virtually no forms of content are purely physical anymore.

That means all of the best practices for website content also apply to your firm’s marketing materials. Writing effective website content has been a topic of past columns, but for the sake of clarity let’s review a few of the important concepts, and how they should be reflected in a firm’s overall content composition strategy. 

  1. Get to the point quickly by writing in an inverted pyramid style (i.e.: structure content where the conclusion comes first, with supporting details following).
  2. Write shorter, skimmable paragraphs, with no more than one idea per paragraph.
  3. Employ a simple sentence structure, with few, if any, compound sentences.
  4. Use bullet points, headers, and subheaders to break up large blocks of text.
  5. Avoid passive verbs and jargon.

What underpins each of these recommendations is the understanding that web audiences do not carefully read website content. Rather, they quickly skim it, looking for relevant ideas which help them to quickly determine if the content answers their questions.

If they determine it does, they will either engage immediately or return later at a time that is more convenient.

Remember – your clients are just as busy as you are. By optimizing the way in which the letter is formatted and composed can make all the difference in how your communications effort is perceived.

In sum…
There are thousands of investment management firms vying for their slice of the industry’s pie.

A crowded industry breeds intense competition, which often means that meaningful distinctions in investment philosophy, approach, and asset management can be easily lost.

What helps managers to stand out are letters that are clearly written, persuasively argued, and address the needs of the audience above those of the firm.


The Asset Management Communications Blog is a resource from Daniel Quinn Communications for investment management firms on effective marketing and communications:

   ~ Inbound Marketing / Content Marketing
   ~ Website and other online content
   ~ Content marketing for asset managers
   ~ Style guides
   ~ Presentation materials
   ~ General advice on effective writing.