Speaking at an event in Sydney yesterday, Janus Henderson co-chief executive Andrew Formica said his industry is particularly bad at explaining what it does to its clients.
The reason fund managers exist is because their clients have acknowledged they cannot navigate investment markets on their own, Mr Formica said.
Clients need investment returns, he said, but they are also looking to the funds management industry to help them make sense of the world.
“They’re looking for people who can make sense of all the different headlines they've seen. And that's where we [as an industry] haven't spent enough time,” Mr Formica said.
“Our industry is poor at customer service. I'm not saying [Janus Henderson] has been any better. But we have to get better.
“Part of Janus Henderson’s future strategy has to be driving customer experience, from a low level (the industry level) up to something that's seen as gold standard,” he said.
Investment management companies need to focus more on telling stories to their clients rather than “shrouding” themselves in jargon, Mr Formica said.
“Yes, we are experts. But we don't have to keep proving it by elevating ourselves with a level of jargon that makes people think 'Oh they're smart, but I don't get it',” he said.
“We need to also get to a point where we interact with every one of our clients.”
This follows compliance experts telling SMSF professionals their lengthy statements of advice, often loaded with jargon, may not be meeting their compliance requirements.
“Your advice has to be clear, concise and effective, and how can 60, 90 or 120 pages be clear, concise and effective?” said Assured Support principal Sean Graham.
“At the end of the day, when the issue is addressed, it’s going to come down to: did the client understand what they were getting? And if the document is 120 pages, is it reasonable to expect the client would understand the advice’s implications, consequences and what it meant?” he added.