The average content produced by investors ranks closer in comprehension to academic papers than to the more-accessible financial media, and 72.5% of the content is written by men, the annual Communications and Content’s readability survey revealed.
The report, released annually since 2019, takes data from 22 fund management companies that were winners at the 2023 Fund Manager of the Year Awards, 10 academic papers from the EDHEC business school website, and 23 investment articles selected at random from top financial media organisations.
David Butcher, author of the report and managing director of communications and content, said: “Investment content is a shop window for the industry – a glimpse of the brightest thinking from the best people. But too much of the material published by award-winning investment businesses is unreadable. And too much of it is written by men, who outnumber women authors by three to one.”
Butcher uses an online readability checker to gather the data, which provides a number score that increases as papers become more difficult to understand, and a reader age, which provides a gauge for who would be able to comprehend the information.
This year, readability for investment content came in at 12.3, a downtick from last year’s 12.8, and marks the reader age at 17.9. For reference, an ‘A’ level economics exam scores around 8.3, with a reader age of 13.1.
The difficulty of readability also keys into the length and the complexity of the language reports use. Butcher cites that 18.2% of investment content is made up of words with three or more syllables and the average sentence length is 21 words. Investment content also goes above and beyond in total length, with a mean of 1,401 words, which is 73% longer than content written by journalists on the same subjects.
“What is staggering is that, even after the Consumer Duty rules came into force, there is no long-term correlation between article complexity and audience sophistication,” Butcher said.
A few companies have maintained simpler levels of readability, with Federated Hermes leading the group at a score of 8.3. Liontrust has excelled in the brevity of its articles, coming in at an average of 778 words, the only company that is under the media average.
Kate Monserrate, director of Simplify Consulting, reflected that people outside the financial industry also struggle with the jargon used around finance, becoming overwhelming for the average reader. Often, she says, her parents are forced to come to her for help in understanding the terms used around their money.
“As an industry we seem to have created a whole new language, which isn’t clear. People’s wealth is so important and precious – how can they be expected to make clear and well-informed decisions if they are not communicated to in a clear fashion?” Monserrate said.
The report also found that articles are overwhelmingly authored by men, with just 19 women represented out of 69 named authors. The number of unattributed articles also came in higher than the number of articles written by women.
“The investment industry needs to rethink its shop window: more readability, more tailoring for client segments and more women,” Butcher said. “The industry says it wants to change – so let’s see a new shop window.”
This year’s report also studied how the use of AI affected report readability, recreating each story with the free version of ChatGPT. Overall, the use of the system made stories 25% more complex, but this ranged widely from 4% to 76%. The use of AI did however make the text less readable in every single test.