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The InvestmentWriting

Handbook

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Founded in 1807, John Wiley & Sons is the oldest independent publish-ing company in the United States. With offices in North America, Europe,Australia, and Asia, Wiley is globally committed to developing and market-ing print and electronic products and services for our customers’ professionaland personal knowledge and understanding.

The Wiley Finance series contains books written specifically for financeand investment professionals as well as sophisticated individual investorsand their financial advisors. Book topics range from portfolio managementto e-commerce, risk management, financial engineering, valuation, andfinancial instrument analysis, as well as much more.

For a list of available titles, visit our Web site at www.WileyFinance.com.

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The InvestmentWriting

HandbookHow to Craft Effective

Communications to Investors

ASSAF KEDEM

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Copyright © 2018 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted inany form or by any means, electronic, mechanical, photocopying, recording, scanning, orotherwise, except as permitted under Section 107 or 108 of the 1976 United States CopyrightAct, without either the prior written permission of the Publisher, or authorization throughpayment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Webat www.copyright.com. Requests to the Publisher for permission should be addressed to thePermissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030,(201) 748-6011, fax (201) 748-6008, or online at www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their bestefforts in preparing this book, they make no representations or warranties with respect to theaccuracy or completeness of the contents of this book and specifically disclaim any impliedwarranties of merchantability or fitness for a particular purpose. No warranty may be createdor extended by sales representatives or written sales materials. The advice and strategiescontained herein may not be suitable for your situation. You should consult with aprofessional where appropriate. Neither the publisher nor author shall be liable for any lossof profit or any other commercial damages, including but not limited to special, incidental,consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data:

Names: Kedem, Assaf, 1973– author.Title: The investment writing handbook : how to craft effective

communications to investors / by Assaf Kedem.Description: Hoboken, New Jersey : John Wiley & Sons, Inc., [2018] | Series:

Wiley finance series | Includes index. |Identifiers: LCCN 2017057969 (print) | LCCN 2017059128 (ebook) | ISBN

9781119356738 (pdf) | ISBN 9781119356745 (epub) | ISBN 9781119356806(oBook) | ISBN 9781119356721 (cloth)

Subjects: LCSH: Investment advisors. | Investment advisors—Marketing. |Business communication. | Finance—Authorship.

Classification: LCC HG4621 (ebook) | LCC HG4621 .K43 2018 (print) | DDC808.06/6332—dc23

LC record available at https://lccn.loc.gov/2017057969

Cover Design: WileyCover Image: © Allkindza/iStockphoto

Printed in the United States of America.

10 9 8 7 6 5 4 3 2 1

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For my parents, Ann and Gideon

my sister, Galit

and my love, Erika

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“You must feel not that you want to write but that you have to.”—Christopher Hitchens, Letters to a Young Contrarian

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Contents

Preface xi

Introduction: For Whom Is This Handbook, and Why? xiii

Acknowledgments xv

About the Author xvii

CHAPTER 1The Building Blocks of Investment Writing 1

What’s Investment Writing All About? 1Applying Journalistic Principles to Investment Writing 2

The Five Ws and the Pyramid Principle 3Inquisitiveness 4Proactive Idea Generation 6

The Strategic Purposes of Investment Writing 7Note 8

CHAPTER 2Writing for Investor Acquisition and Retention 9

Framing Your Investment Proposition as the Solutionto a Problem 11

Step 1: Define Your Offering 12Step 2: Identify Your Client’s Problem 12Step 3: Acknowledge the Problem 14Step 4: Frame Your Offering to Address the Investor’s

Concerns 14Investor Retention: It’s All in the Communication 15

Opportunities for Retentive Communications 17Facts Are Key for Reassuring Your Investors 19

Other Considerations for Reassuring Investors 27Notes 31

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viii CONTENTS

CHAPTER 3Writing for Intermediaries 33

How Intermediaries Expect You to Communicate 34Communicate on a Consistent Basis 34Crystallize the Details of Your Firm’s Offerings 35Provide Timely, Turnkey Investment Literature 35Keep Your Communications Targeted 37

Intermediaries Don’t Have It Easy, So Help Them Out 38

CHAPTER 4Stylistic Considerations for Investment Writing 39

Setting the Appropriate Style 41The Desired Image and Voice an Investment Firm or

Professional Wishes to Project 42The Type of Literature Being Written 43The Investor’s Presumed Knowledge about the Subject

Matter 47On Using Jargon 48

Refrain from Explaining Certain Jargon to HighlySophisticated Investors 49

Distinguish Between the Three Broad Levelsof Investment Literacy 50

Alternatives to Explaining Jargon 52Cut Through Extraneous Technical Detail 53If You Risk Being Vague, Err on the Side of Clarity 54Introduce Fresh Alternatives to Trite Jargon 56Be Discerning about Nuance 58Use Plain Language—Even If It’s Technical 62

Piquing Investors’ Interest 64Forge a Compelling Storyline for Your Piece 64Craft Alluring Headlines 64Incorporate Storytelling and Anecdotes 66Animate Your Writing with Quotations, Metaphors,

and Other References 66The Value of a Style Guide for Investment Writing 67Key Areas to Cover in Your Firm’s Style Rules 68

Syntax, Wording, and Formatting 68First-Person Pronouns and Possessives 69Chart Labeling 70International Considerations 70Inessential Words 71

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Contents ix

Cumbersome Constructions 72Legal Considerations 72Tone 73Principles for Creating Scannable Copy 75Addressing Common Language Mistakes 75

A Parting Note on Style 76Notes 76

CHAPTER 5Developing an Architecture of Investment Content 77

Part 1: Foundational Literature 78Firm-Overview and Investment-Capabilities Brochures 78Strategy and Product Profiles 84Packaging Your Strategy or Product Profile with Other

Literature 107RFP Responses 107Pitch Books 114Case Studies 117Topical Brochures 121Concluding Foundational Literature with a Call to

Action 126Part 2: Intellectual Capital 126

The Strategic Use of Intellectual Capital 127The Elements of Intellectual Capital 131The Packaging of Intellectual Capital 132The Process of Writing Long-Form Literature 140

Part 3: Educational Literature 144Part 4: Digital and Social Media 147Part 5: Shareholder Communications 149

Fund-Performance Commentary 150Now That You’ve Mapped Architecture… 152Notes 153

CHAPTER 6How to Simplify Complex Investment Subjects 155

Think Bits—Not Pieces 155Visualize the Idea for Your Readers 157Start with a Preamble 158Lay Out a Table 160Use a Frame of Reference, Analogy, or Metaphor 160Give an Example 162Note 162

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x CONTENTS

CHAPTER 7How to Make Investment Writing Legally Compliant 163

Avoid Absolutes, Superlatives, and Definitive Statements… 165You Can Be Predictive—But Not Promissory 167Be Specific Enough for Clarity—Yet General Enough

to Accommodate Exceptions 170Time-Stamp Anything That’s Impermanent 171Cherries Are Not for Picking—and Securities Come at a Price 171Negotiate Gray Areas with Your Legal Reviewer 172Use Caution When Navigating Word Subtleties 174Avoid Redundant Qualifications 174Unless You’re Permitted, Do Not Dispense Investment Advice 175Social (Media) Butterflies Are Not Exempt from Regulatory

Requirements 176Consult a Legal Specialist When Writing about Investment

Performance 177Seek Ways to Streamline the Legal Review 177Diversify Your Language 178On Legalities, Creativity, and Integrity 179Notes 179

Epilogue: Where Investment Writing Is Headed in theTwenty-First Century 181

Index 185

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Preface

Investors are dear to my heart: big and small, sophisticated and simple,learned and lay. I write for them daily. They return the favor by mostly

reading what I write (or so I hope), keeping me plenty occupied and furnish-ing my paycheck.

So it’s fitting that I should start by begging for investors’ forgiveness:This book, alas, is not for them. It’s for those who write for them. Yes, thewriters who develop investment literature and communications on behalf offinancial-services firms. You know who you are, dear writers. Know that Itoil among you.

You may be a staff writer of an investment firm or a creative-servicesagency catering to such a firm. You may be a freelancer. Either way, youwould typically be writing on behalf of a firm or investment professional—aportfolio manager, chief investment officer, product manager, economist,analyst, advisor, or anyone in a money-management, investor-relations orclient-service capacity.

That’s not to say investment professionals can’t write themselves. Thereare many who possess financial and writing talent—who have the capacity tomanage portfolios and products, analyze markets, manage client accounts,or serve in related functions—and write terrific, informative prose for theirinvestors. But since there are also mortals who can’t do both at the same timeand do them well, there’s usually a corporate job out there for the dedicatedwriter—likely you. Yet if you happen to be an investment professional inneed of a handbook to aid in your own writing, then this book is for you, too.

Gore Vidal once said that one should write a book one wishes one readoneself. I certainly wished I had a single comprehensive handbook on howto write for the investor during my many years in the business. Absent such amanual or any formal instruction, I had no choice but to acquire knowledgethrough trial and error, or what some would proverbially dub the School ofHard Knocks. In the hopes of allowing others to benefit from my experience,I resolved to pen this guide for those in need of structured orientation to thisspecialized line of work. They include the young and intrepid who ventureto join the professional circle of investment writers—and could now learnin just a few hours’ worth of reading what took yours truly the better partof 20 years.

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xii PREFACE

My undulating career history has taken me through several major WallStreet firms. This history has been at once a challenge and a blessing. Lifeisn’t all smooth sailing in an industry predisposed to economic gyrations.But it is always riveting—and I have tremendous gratitude for the experienceeach of my employers has afforded me. Collectively, they have perched meatop a vantage point from which to survey the competitive landscape. Theview I’ve gained is panoramic, the result of diverse exposure to writing andcommunication practices at an array of marquee institutions with globalreach. And I would like to believe that I am now in a position to share withyou the best I’ve encountered.

I could have given up somewhere along the way during the difficulttimes, but I kept coming back for more. As a writer at the epicenter ofperiodic, nerve-testing turbulence, I was susceptible to any epiphany thatwould have led me astray—say, to become a peddler of herbal remedies orthe founder of a Neapolitan gelato shop. (Such a career change would havealso made for a very different kind of book.) Yet I cannot lay claim to such arevelation. Instead I stayed the course, for I found it intellectually stimulatingand professionally rewarding.

It’s satisfying to have an investment professional tell me, “You capturedexactly what I wanted to say—and said it better than I ever could.” Betteryet, as a communicator, I find it gratifying to be part of a broader effort thatleads to winning a new mandate, to asset inflows into an investment vehiclebenefiting clients, or to the provision of useful and timely information toinvestors in need.

If this book helps bring you closer to even one such moment in yourcareer, then it’s been worth it to me.

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Introduction: For Whom Is ThisHandbook, and Why?

In an inconspicuous corner of the investment business, there’s a valuablecircle of professionals having nothing to do with managing money. Rather

than making investments, they make sentences. Armed with a facility forlanguage, they pen literature and communications for the consumptionof millions of investors—private and institutional—who entrust portfoliomanagers, advisors, and consultants with trillions of dollars in assets.Their words can sway investors’ opinions, shape their attitudes, affect theirdecisions, and drive their behavior.

These are the industry’s investment writers. This handbook is for themprimarily—though not exclusively. It is intended for anyone tasked withthe responsibility of writing for the investor. There are many, which is whythis book is called The Investment Writing Handbook rather than TheInvestment Writer’s Handbook. Still, to understand the context of this craft,it’s worth highlighting the dedicated writers for whom this book is chieflyintended.

Investment writers are an ultra-specialized class of communicators in aniche of the third degree. They are writers of financial services. They serve awell-defined segment of that industry dealing exclusively with investments.And, within that segment, they write for what is known as the “buy side,”which comprises firms that purchase and sell securities on behalf of investorsfor money management.

Investment writers have counterparts on the “sell side,” which includesbrokerage houses and investment banks that underwrite securities, offerpublic analyst recommendations for them, and publish research. This bookis also for them and offers plenty of principles applicable to their business.

Don’t take these über-niche writers for a paltry bunch. The investmentindustry, which plays a major role in the global economy and financialmarkets, employs bevies of them—staff writers, freelancers, and externalagency personnel—who churn out content for a range of communications.At year-end 2016, Cerulli Associates estimated the U.S. investment marketalone at nearly $41 trillion in assets1 that are professionally managed byhundreds of firms on behalf of thousands of institutions and millions of

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xiv INTRODUCTION

households. These investors include mass-market (retail) investors andwealthy individuals, retirement-plan participants, sponsors of governmentand corporate retirement plans, endowments, foundations, sovereign wealthfunds, insurance companies, and other institutions that invest money.

Since the investment business isn’t one of materials but one of ideas,analysis, and consultation, virtually all firms—from hedge funds and familyoffices to large wealth and asset managers—need to communicate regularlyto their clients and place a premium on such communication. So do consul-tancies and research firms, as well as third-party intermediaries that offerthe products of investment firms.

Investment writers are the thought synthesizers and mouthpieces ofinvestment professionals and corporate executives. Often as ghostwrit-ers, and in addition to authoring marketing communications, they helparticulate the viewpoints, analyses, and prognostications of chief executiveofficers, chief investment officers, portfolio managers, product man-agers, client-account managers, economists, analysts, investment advisors,investor-relations staff, and others. Many investment professionals alsocarve out precious time between other duties to write themselves—withoutthe help of dedicated writers—and communicate to investors or the generalpublic about investment issues. This handbook is for them, too, for whenthey don the writer’s cap.

All this is to say that investment writing is a vital function in a businesswhose proposition is intellectual rather than physical. It is performed byseasoned practitioners serving a sizable contingent of firms and their clients,with trillions of dollars in managed assets at stake. Like other disciplines, ithas conventions, processes, recommended practices, and complexities. Likeother art forms, it involves creativity. And, like other weighty professions, itrequires training through experience. That’s enough to warrant a handbook,so here you have one. Brace yourself for the journey.

NOTE

1. Cerulli Associates, “The State of U.S. Retail and Institutional AssetManagement—2017.”

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Acknowledgments

This is my opportunity to heap appreciation upon the thanks I already owethe two individuals who brought me into this world. With fierce encour-

agement, my parents have been pleading with me to write a book—anybook—for years now.

A novelist I am not. A memoir would have been too presumptuous byfault of my relative youth. But since investment writing is what I do by day(and sometimes night), why not share what I’ve learned in my professionallife to benefit others? I met a receptive listener in John Deremigis, whodevoted his generous time to studying my ideas for this book, introducedme to Wiley, and helped usher my career-long wish from the obscurity of apipe dream to the doorstep of reality.

I’d be remiss to not mention Orily Pratt, who was the first to takea chance on me despite my rudimentary qualifications, furnish me with alaunch pad to the world, and demonstrate more than anyone that managerscan and should be talent nurturers. Sending me off to my first senior job,she inscribed a copy of Alice in Wonderland to me with characteristic flair:“Good luck is wished upon those whose success is unsure,” she wrote, “butsince that’s clearly not the case with you, I trust that Alice will help spiceup your journey, make it pleasurable, and afford you counsel in times ofdoubt.” I can’t think of a better nurturer.

Then there are those who opened their doors, hearts, and checkbookswhile excusing my quirks; those who have offered mentorship and friend-ship; and those to whom I owe my professional experience over the years.I particularly want to acknowledge—in no particular order—Diane Gargiuloand her associates, Robert Bilse, Betsy Perlman, Jeanne Sdroulas, BrianSteel, Chris Poe, Daniel Donnelly, Trudi Baldwin, Chris Thabet, BernardDel Rey, Jay Rubin, Judith Jones, Robert Noltenmeier, Robert Bosselman,Joe Kolman, Dorothy Nickelson, Matthew Stadtmauer, Jennifer Babsin, AviSharon, Pat David, Joe Gavin, Ana Duarte-McCarthy, and Robert Brazier.

Regrettably, I haven’t room to list the many more colleagues for whomI had the privilege to write. But I hope they find a token of my gratitude inthe words I’ve left behind.

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xvi ACKNOWLEDGMENTS

Notwithstanding the well-worn adage that a book should not be judgedby its cover, I credit my friend Tim Cilurso for his visually creative gatewayto these words.

Thanks to Evan Gordon, Michelle DeWitt, Wim Vandenhoeck, VeredZimmerman, and Brian Levitt, who shared their perspectives with me forthis project.

Finally, the Bouers, the Rothbaums, and the extended Kedem andRabbani families have been New York’s gift to me since Day One. And itis Erika Woods, my sounding board and veritable rock, whose unfailinglywise counsel I could not do without.

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About the Author

Assaf Kedem is an award-winning writer who, over a career spanningtwo decades, has served in a range of communication roles at global

financial firms, including JPMorganChase, Merrill Lynch, BlackRock,Citigroup, Morgan Stanley, AllianceBernstein, Kohlberg Kravis Roberts(KKR), MSCI, and OppenheimerFunds. He is also an adjunct professor ofwriting and communications at New York University’s master’s program inpublic relations and corporate communication, and he lectures periodicallyat The Summit for Asset Management (TSAM), a global congress and seriesof events featuring educational discussions about the investment industry.Assaf earned an M.S. in strategic communications from Columbia Univer-sity and a B.A. in economics and management from the Israel Institute ofTechnology (Technion).

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The InvestmentWriting

Handbook

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