David Butcher, MD at Communications and Content, explains why firms need to take readability more seriously when implementing consumer duty.
It’s easier to read an A level economics exam paper than it is the average piece of investment content.
This isn’t just an intuitive claim – informed by years of wading through stodgy fund management thought leadership – it’s also an empirical assessment.
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It comes from the 2023 Readability Report. Every year, we use a readability checker[1] to measure the readability levels of material published by each winner at the Fund Manager of the Year awards.
The checker provides a readability score – where lower is more readable and higher is more complex – and an equivalent reading age.
Do these high-performing, trusted brands publish readable material?
It is hard to say so.
This year, the 2023 Readability Report found that:
• Investment content has a poor readability score (of 12.3) – which is closer to complex academic research papers (13.1) than the more popular and accessible financial media (11.1).
• Measured by reading age, this year’s crop of investment content (at 17.9yrs) is comparable to reading the UK’s A level study materials.
• In fact, a 2022 sample of past economics A level exam paper papers (readability score of 8) are significantly easier to understand than investment content (12.3).
This isn’t encouraging. The data have sat in this region across the five years we’ve produced this analysis.
But now the regulator, through Consumer Duty, is seeking simpler communications from the industry, tailored to the capabilities of its audience.
Over time, there is little evidence the investment industry moulds investment content readability to its audience. The below chart shows readability categorised by the audience labels attached to items of content.
There is a randomness here that doesn’t quite tally with the spirit of Consumer Duty. For example:
• In 2022, companies directed their most unreadable material towards those least equipped to understand it: consumers.
• In 2020, professional fund buyers – perhaps the most technically equipped audience – got the simplest content.
But now the 2023 data is broadly aligned with regulatory intention: simple material for consumers, complex stuff for professionals. Is this accident or design? We don’t know. The data in next year’s 2024 Readability Report will tell us more.
However, there is a strong case that readability scores should be low, irrespective of audience.
People don’t read much these days – about 15 minutes a day for pleasure[2], and probably a little more for work. People also scan online text, only having time to read 28% of the words on the page[3].
Limited time is compounded by information overload. Recent academic studies demonstrate this point. A 2019 paper asserts, “…producing and consuming more content results in shortening of attention spans for individual topics and higher turnover rates… .”[4]
Notwithstanding some impressive outliers, the fund management industry persists with lengthy, verbose material, which makes it hard for any reader to extract the key points.
But surely readers – from consumers to chief investment officers – deserve the courtesy of more accessible material?
After all, better readability should intuitively lead to better engagement.
The 2023 Readability Report is free to download at https://www.communicationsandcontent.com/research/
[1] https://readabilityformulas.com/readability-scoring-system.php
[2] https://www.bls.gov/tus/tables/a1-2022.pdf
[3] https://www.nngroup.com/articles/how-little-do-users-read/
[4] https://www.nature.com/articles/s41467-019-09311-w
