DeMoss: Welcome to our session. My name’s Gary DeMoss. I had a great opportunity to be in front of a lot of you yesterday with a program called “Showtime.” I’m really looking forward to our session today.

I head a group inside of our company, Invesco. We’re a communications consulting organization, and we do a lot of work around words and language, which we’re going to talk about here this morning. But before we get going, I want to introduce my co-speaker today, Suzette Rothberg. Suzette, why don’t you give them a little bit of your background. She will be presenting with me here this morning.

Rothberg: Thanks, Gary. And welcome to everyone. My background is, I’ve spent nearly 28 years in the industry. I am a certified financial planner and a speaker who travels the country, speaking and coaching advisors. I’m truly excited to be here, so thank you.

DeMoss: Yeah, great to have Suzette here. So I want to get you started. I want to open up with a story. If you’ve ever seen me speak before, you know we always like to get some stories going here.

I happen to be from Chicago. Do we have anyone here from the Midwest? Chicago folks? OK. I happen to be from Chicago, and one of the reasons that I love Chicago is because of Lake Michigan. How many of you have ever been to Chicago and have been to Lake Michigan? Well, one of the reasons I love Lake Michigan is because I’m a boater. I love to boat. I’ve been doing it for about 20 years now. I actually keep my boat over in Grand Haven, Michigan. Do we have any Michiganders here? So I keep my boat over in Grand Haven, Michigan, and Grand Isle Marina is the name of the marina.

This is actually slip No. 67, as you can see up on the screen. [visual] That’s my slip, and the marina is on the Grand River, which kind of flows out into Lake Michigan, and so my boat is the kind of boat you take out in the fall and put back in the springtime. When you put it back in the springtime, it’s a big event. We don’t have very long summers up there, so it’s an exciting event. You can either have a captain put it in for you, and they just do it for you, or you can do it yourself. And so this year, I decided, I’m going to do it myself and I’m going to actually bring the family with me. I’m going to bring them with me, and we’ll make it a big deal. It’s going to be a lot of fun. And I’ve docked this boat many, many times before.

So the way you’ve got to do this is you swing it wide and then you punch it in. And so, like I have many other times before, I start the process, and I’m going and I start to swing it wide, and, all of a sudden, I’m getting carried down the river. I completely missed the dock. I mean literally. I’m going down perpendicular to the dock. The tip of my boat is almost hitting all the backs of these boats. This has never happened to me before, and I am shocked. What just happened here? I’m a little shaken, needless to say.

See the little guy in the red, in the bottom right there? [visual] That’s Ron. Ron is my next-door neighbor. And Ron is the kind of guy who gets to the marina on Friday nights, pops open the martinis and doesn’t leave until Sunday evening. And yet Ron knows everything there is to know about boating. He knows everything. But he never leaves his slip. You got it? You got what I’m talking about? He knows to tell everybody what to do, but you would never catch him out on Lake Michigan at all.

And so Ron goes, “Gary, you need some help?” And I make the first mistake of my day, and I let Ron on the boat and say, “Yeah, I’m up for it. You tell me what we’ve got to do here.” So this is what happens. So I am, basically, pointed up river. And this is Ron’s instruction: “OK, Gary, this is what we’ve got to do. We have to go in under power today. We’ve got to go in under power, and this way, when we level up with the slip, I want starboard to reverse port to forward, and then we get past that, and I want port to neutral, starboard to neutral, and then port forward, starboard back. And when we get in there, I want port and starboard to forward.” OK. Everybody’s got that, right? Everybody understands the instructions that I was given and how to put this thing in the slip?

So we start this, and, oh, by the way, my neighbors are all basically going, “Let’s enjoy the show here.”

If you’ve ever been around marinas, there’s this pride of the captain: “Oh, I can do these things.” And so, I’ve got 30 people sitting there watching. And we start this whole process, and Ron is screaming, “Port forward! Starboard to reverse! I want starboard forward! I want the port back!” And I miss and hit the gas on my boat. I go over this piling into my neighbor’s boat, and, one more time, I am going broadside down the river. Completely and totally out of control. Totally out of control.

So let me give you the financials on this wonderful event. See that little piling. [visual] That’s the little piling I went over.

By the way, notice my friends on the dock. They’re just a little shocked at what’s going on. I knocked the piling completely over. This boat is a 25,000-pound boat. It just took the whole thing out. That was $5,200 to replace that. Then my boat has this thing called a bow pole, but it’s like a big fin on the end of your boat. I went into my neighbor’s boat, punctured his boat, and I put a 5-foot slit down his boat — 5 feet. I mean, boop and then boop, like a can opener. It was $27,500 for that.

So give up boating. You do the math: $32,700. Thank goodness for insurance, right? Thank you for insurance.

Look at my family on the boat: “OK, we’ve about had it with you, Dad. No more of this anymore.”

And, luckily, the guy who sold me the boat — his name is Terry; he’s the guy in green [visual] — was there. He saw this happen. He goes, “Gary, can I help you out?” I said, “Terry, look at one more time, and this point is going to be yours.” And so this is what he says to me. Terry says, “I want the right lever for the right engine when we even up with the dock because we’ve got to go in just a little bit faster. I want that to reverse, and I want the left engine lever forward. And you just listen to what I say.”

And so we go a little bit quicker, and as soon as we even up and start the whole process, he goes, “Right engine back. Left engine forward. Left back. Right forward and left forward.” And boom. In the slip we go, and everybody’s happy, right? And everybody’s jumping around. Everybody’s pleased. I am extremely happy.

Here’s the reason that I open up with this story. I want you to focus on the differences between the conversations with Ron and Gary. You see, Ron wanted to speak to me in nautical language. He is so technical that he wanted to make sure that we were bow and we were stern and we were port and we were starboard. And under power just means you’ve got to go a little bit faster. And port and starboard are left and right. Right and left. But, you see, he wanted to speak to me in a language like, yeah, I kind of get it. I do get it when it’s nice and calm. But in the pressure of trying to land a boat like that, he totally and completely confused me, and the consequences of that were severe.

And if there’s one thing that I learned from that, it’s simply this: It is that words matter, that the words we choose to use with our clients make a difference. They do make a difference. And if you take anything away from what Suzette and I will be talking to you about here today, it’s this: It’s not what you say that matters, but what really matters is what clients are hearing when we are speaking with a language that we are so very, very comfortable with. And that’s what this presentation is really about.

So some of you may have seen us yesterday. Suzette, why don’t you give us the background on where this research comes from.

Rothberg: Sure, Gary. So if you think about it, it’s really the work of two key sources. No. 1, the group that we’re associated with is Invesco Consulting. And as maybe Gary shared with you yesterday, we’re a group within Invesco committed to helping you get, keep and grow your business.

We’ve taken all the principles that we know, and we partnered up 12 years ago with a group called Maslansky + Partners. Now, Maslansky + Partners is known as the word specialist. Here’s why.

They test the emotional impact that words have on individuals. Think about that for a moment. Ask yourself, Why does it matter that we understand the emotional impact that words have? And then I propose the questions: How do people make decisions? Do they make decisions because things feel right? Or because they make sense?” What would you say?

Feel right. Absolutely. Well, let’s have a little fun here. Here’s a quick survey, if you don’t mind, Gary. Quick survey. Of those of you in the room who made that incredibly important decision of whom you would spend the rest of your life with, how many of you created an Excel spreadsheet listing all the variables of your fiancée? Show of hands. Come on, there’s always one. There’s one. There’s always one. Anybody calculate the alpha of their fiancée? The correlation, coefficient? No? OK.

Well, I share that because we make that decision with our gut and, don’t forget, so too people will decide whom to trust their entire life savings to with their emotions. So we can understand that it’s incredibly powerful.

What I want to do is give you just a deeper look at the work that we do and the research that goes into what we’re about to share with you today. [video]

Video: It’s not what you say that matters; it’s what your audience hears. When we hear a message, we react first in our gut and then in our head. It’s emotional, not rational. And as landscape partners, we specialize in language strategy. We look at a lot of situations where a company is facing something that’s either controversial, or they have a product that’s complex where they’re in a market that’s extremely crowded and they don’t really know how to connect with their customer. And, in each of those cases, they find it hard to choose the right language to be effective. And what we try and help them do is understand what the barriers are to communication and why it is that their audience isn’t getting the message and what can they do about it to be more effective.

This research that we’re doing is part of what’s become the largest study of financial services of language and communication ever conducted.

Tonight, we’re looking at a very real challenge that companies face in trying to provide a 401(k) benefit for their employees. Across the country, people participate less than they should, and they contribute less than they should. We’re going to find some specific language about how you take a product like a target date fund and make it really attractive to people.

Who says it’s a bad thing? Why is it a bad thing?

How can we look at the audience, look at their perspective and then build language for them so that they can understand it, so that they’re likely to believe it, and so that they find that message attractive? Very often, the answer comes down to understanding how the human brain processes information. In an instant response, we can present a whole series of different messages, of different ways of articulating that message, and get that emotional reaction in the instant. And then we can conduct a probing conversation with them and understand the “why” behind the “what.”

OK, who thought that was the best one? Tell me why. What was it in there that made that the most effective?

A dial is a way of registering moment-by-moment reactions to an individual message. It is a very simple tool that lets you go from zero to 100 and continuously react as you’re listening to a message, without thinking about it, so that we can get your visceral response to each word and phrase. We really understand the way that human beings interact in a communication context. We can help build communication strategies that are going to get through. They’re going to be understood, and they’re going to be believed by our clients.

Rothberg: I think that gives us a good perspective of just the level of research, but I want to show you specifically what we did. It’s really a series of three steps. And first, we start with you. We really start with you. No matter what language we’re testing, we really want to understand what the messaging is that you’re putting forth, what you are saying naturally to your clients. We scour the industry, and we gather that conventional language. We then conduct these dial sessions, just as you saw in the short video, where we’re bringing together groups of 30 to 40 people. Each participant is given a dial. And, as you saw in the video, the dial looks something like this. [visual]

Those dials are set at 50; 50 represents emotional neutrality. I feel nothing good. I feel nothing bad. And then we ask those participants to watch an actor on a screen share a message, and that actor is playing you, right? And sharing this message. And then we ask them to simply dial up if they like what they’re hearing or dial down if they don’t like what they’re hearing. But we gather that instantaneous, simultaneous and anonymous understanding of which words are working and which messages are working. It’s quite powerful and insightful.

Then we, of course, follow up with some Q & A to really make sure we really understand it. And then, lastly, we validate all of our findings. When we think we have it just right, we put it through one last test by conducting a national survey.

And so, from this, we feel very confident that we know which words work, which messages absolutely work. And, as you heard, having done this for over 12 years, we believe we have the largest collection of financial language in the perspective of what those really powerful, emotional responses are.

So it gives you a deep sense of what you’re about to hear today and, specifically, where it comes from. So, Gary, let me turn it back to you and see if you want to start with the principles.

DeMoss: Yeah, so what I want to do with you, as Suzette mentioned, is the entire process. Right now, we’ve sat through 63 separate focus groups, three to three and a half hours long, listening to clients respond to the language we use all the time. We have probably upward of 60 different videos, and we’ve surveyed over 15,000 people. We don’t have time for that, so what we have done is boiled this down to four critical communication principles that we think you need to take a look at.

The application is, first of all, in your conversations. We’re going to talk about words and the impact that certain words have that you use all the time. Secondly, in the literature that you create if you do create literature, how you create that and what you say in that literature. How many of you have LinkedIn? So what you put on LinkedIn, what language you use in social media, how you talk with them. Think about these four core principles. That’s what we’re going to share with you in a few minutes.

Now, in just a minute, we should have some folks from MDRT here. I’m going to hand out to you, in just a second, a set of cards? Everyone of you is going to get a set of cards. This is not going to embarrass anybody. The hardest thing is going to be getting them out of the wrapper, I can tell you that right now. And so you’re going to get a card, there’s going to be a phrase on the front and there’s going to be a phrase on the back.

So this one may say, “straightforward versus transparent.” [visual] You are to choose, and now make sure you hear me clearly, which phrase or words you think clients like best. Not you. But what clients like best. So there’s going to be a front versus a back. Why don’t we go ahead and hand out all those cards right now.

What you need to do is to get the nine winning phrases. Just put them face up. Clear a little space over here and we’ll get those out. You want to have the nine winning phrases face up in front of you here, and we’re going to kind of see how everybody does here.

Don’t worry about the blank cards, just the cards with the numbers on them. You’ll find a couple of cover slides in there. I only want you looking at the ones that have front and back phrases here.

Open them all up. Find a little space on the table. Put them down. Nine winning phrases. Card by card. I think it’s “straightforward,” so I’m going to put “straightforward” face up so that I can see that. Front versus back. What do you think that clients like best?

Take a few minutes. Look at this. Study them. You should have nine cards face up.

I’m going to tell you that I’ve been doing this for many, many years, and probably 30,000, 40,000 people at one time or another have seen this, and I do this same exercise. You want to take a guess how many people get them all right? All of them?

Seven. OK. So I’m throwing the challenge out. I’m pulling for you. I really am. I am pulling for a perfect score today. So there’s stuff riding on this. This isn’t just a silly exercise. This is real stuff, OK? I think there’s a new car or something we’re getting.

OK, everybody got them down here. So here we go. I’m going to get started. I’m going to talk about the four principles with Suzette. Here’s principle No. 1. Principle No. 1 is what is out with clients in our communication is any element of fear-based selling. What is in is people wanting positive and hopeful messages. Positive and hopeful messages.

We use the phrase, “bear market.” You know why they call it a bear market? Anybody know that? I mean, bear — that doesn’t sound real positive because that’s how bears kill. They come down on their prey. And what do we call a bull market? A bull market — they’ve got the horns going up and that little matador is going flying. I’m going to go back because I spend a lot of time on this slide here. [visual] The bulls go up, and there goes our little matador friend. But the terminology we tend to use in our industry is interestingly, many times, fear-based, and we don’t even know it.

That is the real scary part. I’m going to show you a video here in just a minute, and, to Suzette’s point, to give you a perspective on this grid. [visual] Fifty is at neutral. And all that means is they don’t feel anything toward you. I’m just like, “Yeah, you know, whatever. You’re whatever.” Anything above 50 is great. If it gets into the high 60s, that means they absolutely love you; they are so in love with your message. And, by the way, anything below 50 is not good, and if it gets down to the 30s —and, by the way, you’re going to see this on a lot going forward, a lot of the political elections. You’re going to know exactly how these dials work because this is where that originally came from — measuring people’s emotional responses.

So I’m going to play this video and let’s see if you can figure out what words or what happened to get the emotional response that happens in this video. [video]

Video: We all hope that the market does well during our retirement. But what if you retire right at the beginning of the long bear market? In order to get the returns you want, you will have to leave your money in the market until it turns around. It could be two years or 10 years, but until it turns, your quality of life and retirement, unfortunately, can suffer at the whims of the market.

DeMoss: I’ve seen this a million times. Obviously, we said, we all want our money to do well in ... Everybody wants that, right? OK? What was the key phrase? You said, “have to” OK, I’ll come to that statement in a few minutes. What else? “Unfortunately.” How about this one right here: “bear market.” The minute we start talking about bear markets and then all the other things that he started to pile on to make sure that, boy, I’ll tell you, look what could happen to you. This is going to happen. We were showing this exact dial in Manhattan many years ago. And this woman raises her hand and says, “You know something? You are trying to scare me into buying these investments, and I don’t like that. You don’t think that I don’t realize that there are challenges in retirement? Please.” And then, all of a sudden, about 10 or 11 of our participants in that group of 35 started to get it, and they just started to pile on.

How many of you thought that this was over the top? I mean, we have dials in the 30s. They were angry, just to let you know. They were angry at that message. Not just like, “Eh, I don’t like it.” They were angry. How many of you thought that was an over-the-top negative message? A few of us, yeah. A few of us. I didn’t think it was that bad. I thought it was, yeah, but when we did this, we got this language from exactly the people in our industry who have been using this all the time. The reason I bring that to our attention is just to keep remembering this: It’s not what you say that matters, but what matters is, what are people hearing? What are they hearing when we are speaking? So this is a huge principle in our literature, in our website, in your conversations. Fear-based selling really is out.

Let me show you some survey work that we’ve done here. We asked these questions, which interests you more as it relates to these three issues. And, by the way, these three issues are managing market risk, managing inflation risk and managing longevity risk. These are the three reasons, right here, in life that, as an advisor, all you have to manage for people. These three things. These are the three critical areas. If we don’t manage them well is why people will run out of money in retirement. We don’t account for market risk. We don’t take into account inflation risk, and we certainly don’t take into account longevity risk.

So we need to talk about these things, and let me be really clear on this. This is not about being so Pollyanna and positive that we don’t address the serious issues. These are all serious issues. These are the things that cause you and me and Suzette to run out of money if we don’t manage it well. We have to do this. But how can we talk about that?

Let’s see what the survey shows. If I’m an advisor and I’m in your shoes and I go, “This is what I do. I manage market risk, I manage inflation risk and I manage longevity risk for you” — I said it a little more eloquently than that — which way do you think the dials go? Do you think they go up or down? Up or down? They’re going to...

So here we go. I can say, “Managing my market risk,” and I get a 37 percent return. However, what if I said it like this: “By making sure that you can participate in the gains while reducing your downside risk”? Just a few more, almost twice as many, liked that. I can talk about managing inflation risk, 19 percent, not doing real well. Or I can talk about making sure that you can afford to maintain your lifestyle in retirement. Excuse me, a few more people want to hear about that.

And then this last one — we’ve found in our survey that everybody wants to talk about longevity risk. They all have a passion to talk about when they’re going to die. Wrong. Wrong. They don’t. But it’s a critical factor for us to think about in our financial planning. So what if we said, “You know what? Part of my responsibility is just making sure that you have enough money as long as you live.” Just a few more people want to hear about that.

And really, I say this a little tongue in cheek, but I’ll tell you, get those three phrases down in terms of what you do for people and helping them in retirement. What do I do? I make sure that you can participate in the gains while reducing your downside risk. I make sure that you can afford to maintain your lifestyle in retirement. And then, finally, my most important job is to make sure you have enough money as long as you live.

How many of you, personally, like that message? I mean, I’m not that close to retirement, but sure. There’s a reason why this works, and it’s the whole idea of this little thing called the “benefit.” Right? Everybody in this room, everybody at every table, all around me, knows a feature and a benefit. What do people buy? Which one? Features or benefits? What do they buy?

They buy benefits. All the time. And I know this seems really elementary. When I grew up, my first job out of school was at Procter & Gamble, and I was taught how to sell features and benefits, and then I immediately forgot it two years into this whole thing. But the more that we do these dials, we see the power of a benefit.

What I really liked about the speaker this morning — the guy in the green glasses — is, hey, I think he was really trying to push some of us into the digital world, right? To kind of get moving in this direction. Suzette and I — it was kind of funny — were having this conversation. All of these other speakers have Twitter and LinkedIn and everything, and everybody’s kind of saying, “Well, you’ve to get Twitter.” And Suzette’s all over me. But I just don’t because I don’t like to talk about myself and she’s all, “You’ve got to put this on. You’ve got to do this.”

Rothberg: You have to.

DeMoss: Have to. I know, I know. But you know what he did that was genius, I thought? At the very end, in that little scrolling script — and I don’t know if any of you caught on to this — this is what he said to me personally. As I’m sitting right back there in the dark after listening to Suzette lecture me on why I need to put the mobile app on my phone, and it took more than 15 seconds and I checked out. And he says this, “What do you want to leave as your legacy?” Anybody catch on to that? “This whole thing of digital is, Gary, the reason you need to do this and the reason that you need to be fully engaged is, think of the legacy that you leave behind.”

I have six children. That’s important to me. Maybe not as important to others, but I’m sure everybody in this room loves and understands the idea of legacy. And I’ll tell you, he, in a genius way, talked about the benefit of digital. And this is what it can do. Anyway, I’m going to move on. But I have a real passion.

We learn these things in these little sessions that we do, and I feel it’s just imperative. It’s a reminder of how powerful that is.

OK, so here we go. We’re going to have some fun here. Get your cards; look at your cards. How many of you had “voluntary contributions”? Raise your hand. Voluntary. How many of you had “automatic”? Raise your hand. We’ve got about a 50/50 split. We’re going to lose half the room. That’s OK. Trust me, it’s OK. There’s nothing wrong with it. I’m not trying to shame anybody. I’m not using fear-based tactics here, but here we go.

Here’s a response. What is the best way to describe the level of contributions taken from your salary? Is it default? Is it automatic? Nice response. It is voluntary. Voluntary. Now, I want to just say something very quickly about this. You cannot emphasize the word “voluntary” much. Why do you think they like voluntary? Because when it’s voluntary, I have a what?

Rothberg: Choice.

DeMoss: Choice, choice, choice. Another critical concept in all the focus groups. We probably test this in 70 percent — this whole idea of making sure that your clients feel like there’s a choice in the decision. Feel like there’s a choice. Choice is absolutely critical. Every time we mention that, dials go up.

Here’s another one we’ve got here. How many had “minimize my losses”? Minimize my losses, OK? That’s what we do. How many had “maximize my gains”? Wow, we’ve got about a 50/50 split here going. So which interests you more? Maximizing my gains or minimizing my losses? Maximizing my gains. And I will tell you this, this is a real interesting piece. We have been studying this since 2007.

Rothberg: Right.

DeMoss: And which do clients want us to lead with and to talk about every single time? From 2007 to 2009, we were in Denver on March 6 or 9, or whatever that was, on a Wednesday, at the very bottom of the marketplace. We were walking to this focus group in a freezing winter of Denver, and all of sudden we go, “These people, what are they going to do? They’ve lost 47 percent of their portfolios.” Are they going to be engaged with us? And you know what they told us they want their advisor to do? “I want you to focus on gains in my portfolio, not protecting my losses.” Because what happened in our industry was, we went all the way from gains into losses.

The whole idea of focusing on risk management, nothing wrong with that. Please understand that. But we’ve been leading with risk management, and what we’re saying is, don’t forget the fact that people want to focus on gains. Suzette, do you want to add a comment there?

Rothberg: Yeah. I would add in here, don’t you think that gains are really a benefit?

DeMoss: Absolutely. Totally.

Rothberg: And then when we think about the losses, what strikes me is I think that’s back to the negative, isn’t it?

DeMoss: Yeah.

Rothberg: Yeah.

DeMoss: It’s back to the fear-based. Again, a benefit of that is we have to talk about both of them. It’s just a matter of what we lead with, and understand that I’m not talking about gains, losses or protecting the downsides, but we need to talk about gains.

Do we have a question? Yes, sir.

Audience: There’s a lot of research on that sort of behavior. I think a lot of people hate losses twice as much as they hate the gains. That’s the research. I read that because I’m in it; I’m here. They’re reversed.

DeMoss: I was in Liverpool three weeks ago. Same exact point came up. A lot of the stuff we hear of the behavior science is exactly the opposite. All I can do is tell you that we’ve sat in 60+ focus groups; we’ve surveyed over 15,000 people; and we’ve asked this question, and, every time, we get the same results.

Audience: And you don’t feel like that’s age-based? Do you think that that response is age-based?

DeMoss: So the question was, “Do we feel that this is age-based?" And I will say that there are some slight differences with younger people, the millennial crowd, who are going to be more adverse. A loss is a loss. I’ve got 40, 50 years, but as we get older, certainly, losses have become much more important to us. Generally speaking, we’ve got in our focus groups people anywhere between 40 and 65 years old. That’s the group that we’re going after. That’s the group that has the money. Those are the people whom we survey, those with investible assets of $700,000 or more. And, again, I totally understand where you’re coming from, and we’ve heard that before. All we can do is, not only in the surveys but in the dials, ask these people why. So, yes, yes, yes. I never want to lose money. I understand that. But I don’t want you to forget that I want you to grow my money too.

Audience: I think these cards and what you’re talking about have to do with the self, have to do with talking to our clients and bringing them into a process. And that many times, we have to be aware that what they say and what they respond to on the front end is not going to be their reaction on the back end. OK?

DeMoss: What would be the back end of that?

Audience: The back end is the research he was talking about that when the down markets happen, much to their surprise, and probably the advisors surprise, they’re much more concerned about the loss than they were about the fact that a year before, they were up 30 percent.

DeMoss: Right. Right. Well, I’ll say this. We have tested this, as I mentioned, in 2007, in almost every market condition there is. Every market condition. When the market is down, when the market is up, and, again, I come back to this, we’ve had the exact same response. And certainly, and like I said, in that Denver focus group where their portfolios are down 47 percent, the thing that they told us was “I don’t want my advisor to lose the perspective that I do want my portfolio to grow.” That’s the only thing that we’re saying here. It’s not that we don’t talk about how we have a risk management and we’re going to protect you from those losses. But let’s don’t lose sight of the fact that they still really do want their portfolios to grow. And that is a benefit to that.

Rothberg: I think your comment was right on, spot on. There’s a nuance there.

Audience: You’ve got to be real careful about your language because of compliance issues. And I would argue that I understand your research, but if I were to put middle America, which is my marketplace, in a room, they’re much more concerned about losing a portfolio or losing any money than they are about making money. Yes, they want to make money, but I would disagree with that statement. I would say people are much more concerned with loss than gain.

DeMoss: Yeah. Fair enough. Fair enough. Agree to disagree.

Audience: So, I understand what you’re saying here. However, I think we’re missing the point in that we’re assuming that everybody’s assets are in a market program. If they would’ve had a disparaging of some whole life insurance, they would be more stable when their market tumbled.

DeMoss: Yeah, I totally agree.

Audience: Hey, the market’s a great thing. You know what? Two weeks ago, I didn’t lose a penny when I made my premium payment.

DeMoss: Well, and again, what does that do? What does that do? It protects …

Audience: It balances.

DeMoss: It balances that. And that’s really kind of what we’re getting at here. And that is not to lose the fact that, yes, we want to talk about making sure that people don’t have a loss and we’re protecting on the downside, but we’re also recognizing we want their portfolios to grow. Your comments are well taken. I totally understand where you’re coming from.

Which of the following do you least like to pay as an investor? All right. I don’t have a card on this. Take a look at that for just a second. Look up at the screen. [visual] Make a decision here. How many think ... Least, least, least, least like to pay.

Just raise your hand: How many think “commissions”? How many think the word “fees”? Raise your hand.

Rothberg: There you go.

DeMoss: How many think of the word “charges”? Raise your hand. How about “costs”? Raise your hand. All right, here we go. It is cost. It is charges. It is commissions. It is the word “fees.”

Rothberg: Good job.

DeMoss: Again, we’ve tested it on almost every one of our studies on this. Let me just give a little background on the word “fee” here, and again to your point on compliance, we’re never going to get rid of the word “fee.” But there’s a way that we can handle this so that we don’t get such a negative emotional response.

Remember, I care how people feel when you use this word “fee.” Now, there’s a reason why, because what happens in culture is it impacts the way people feel about words, and it impacts the language that you use on a day-to-day basis. Since 2007, 2008 and 2009, what have companies been trying to do out the wazoo when revenues are down? They are trying to add on additional fees to just every walk of life.

I mean, you could just walk around. When you check out of this hotel, we thought that the cost of our room was X. Has anybody ever done this? I thought it was $175. It’s $205. Why? Why?

Fees. There’s about four or five little innocuous fees. It drives me crazy. How about your phone bill? Have you ever tried to read your phone bill, and you thought it was this and it’s that?

You just give up. You talk about an industry that needs advisors to interpret things. It’s the whole phone industry. Suzette and I travel a lot, so we return Hertz rental cars all the time. Every week. When they give me my bill, and then they drop the bill, they open up all the pages, and, literally, it falls. There are about seven or eight pages of what?

Fees. I don’t know about you, but I don’t like the word “fee.” I’ll never forget. I’m in Chicago. I’m leaving to go to San Francisco. The price of my ticket was $245. I don’t know if you’ve flown before to San Francisco from Chicago. There was a woman in front of me, and she was going to Peoria, Illinois. Peoria. It’s a 20-minute flight. The cost of her ticket was $945. Go figure out the pricing model for this, right?

So she takes her bag, she puts it on the weigh station, and the attendant goes, “Oh my gosh, I must apologize to you, but, unfortunately, your bag is over the limit, and I’m going to have to charge you an additional $75 baggage ...” What?

Fee! Fee. And they hear that, and they explode. And then we and our business say, “We are fee-based advisors. We do fee-based planning.” And, in the end, I’m just saying, they come off for a while. They think fee is something that you tack on in addition to everything else that you do. Now, I’m not going to leave you hanging here because as I’ve said, you’re not going to get rid of the word “fee.” But let me say this — there’s a way in which we can frame this with language that can get people to understand that you need and deserve to be paid for the services you provide, and it is the word at the very bottom of the screen. “Costs.”

So we always frame fees first with the word and the idea and the phrase “cost.” So what if somebody asked me, “Tell me, how much do I have to pay for this?” “Well, first of all, I want to make sure that you understand everything that we charge for. Let me explain what the costs of our services are.” You say that little sentence right there, and this is what happens. They go, “Oh. Oh. Costs. Well, of course I know that there are costs.” And you say, “These are the costs that you will incur.” And then they just settle down. And then they go, “Fine. Give those to me.” And then we can talk about if we have to use the word “fees,” we can actually use the word “fee.”

Rothberg: I think that the fact is that people understand there’s a cost to expertise. Right? We understand there’s a cost to the services you’re providing. I understand from Accounting 101 that there’s a cost to make the widget. So we understand cost. What I don’t like, Gary, are fees. And so, if I’m in your shoes, I’m going to embrace this word “cost.” I’m going to use it all the time, just as Gary said. You’ll see a positive emotional response. I might say, “If I’m in your shoes, Mr. and Mrs. Prospect, this is the cost of my services. Now, let’s compare them to the fees you’re currently paying.” Did anyone catch that?

DeMoss: Can you go back and do that again? One more time. Genius, really.

Rothberg: All right, so I’m talking about the costs of my services, and then I’m going to compare them to the fees you’re currently paying.

DeMoss: Makes a big difference. Makes a big difference.

Rothberg: They’re on it.

DeMoss: And we’re not trying to manipulate anybody because here’s the bottom line. We have to talk about the cost.

Rothberg: Right.

Audience: So, in the media, of course, they’re always harping about fee-based, fee-based. You want to go with a fee-based planner. What do you call yourself if you are a fee-based planner? If you’re a cost planner?

DeMoss: No, no. I would basically call myself a planner.

Audience: A planner?

DeMoss: I would, I would. I would not even bring that up because here’s the deal. Everybody used to think that this word “fee” is really cool. It’s great. It’s going to bring business in. I’m just saying, they don’t like the word “fee.” And I would just call myself a planner. Then I get into the cost conversation when the time is appropriate. I just wouldn’t lead with that as my calling card. And that’s really what we end up doing there. OK?

Great questions. Love these. Love these. Moving on here. All right, here’s another. Which of the following is most important to you that my investments are ...

I don’t have a card on this. I don’t have a card. But here we go. Cost. How many think “cost-efficient”? Raise your hand. How many think “high-value”? Raise your hand.

How many have “low-cost”? Raise your hand. Interesting.

OK. So, low-cost, high-value. I think most of you got that. Cost-efficient. There you go. Just write those two phrases down. Really interesting. We’ve tested this whole idea on low-cost. Maybe for the last, I don’t know, 15 surveys that we’ve done, and it always comes back to what people are looking for from their investments: I want things that are cost-efficient, high-value. That’s what I want.

When we said the word “low-cost” in our focus groups, what do you think they surprisingly said? They said “low-cost” means what? Cheap!

Every time. It’s just like you in unison, 35 people. Cheap!

And yet, I do know, and I do understand. People buy low-cost investments; lower is better than low because low, to them, means cheap. But what really resonates with them is the fact that I really care what you pay. Now, when you become a client of mine, I’m always looking for ways to provide cost-efficient, high-value. High-value. How many have ever heard that whole life is too costly? Anybody ever heard that? Right, right, right, right, right. But how about the high-value part of that? What about the value part of this whole thing? Do people just forget about that? So that’s what I try to do, and I can say that with integrity.

Which does a better job of explaining what ETFs are? I took this from our ETFs study. ETFs are a low-cost, liquid investment that uses the market capitalization of an index that can be traded in today. ETFs are cost-efficient. Again, one more time. Just another proof point, we find this, whether we’re talking about alternative ETFs or mutual funds. Let me go back to that if you’re going to take a picture of that. It is just a very effective way to introduce, and I’m going to talk more about the cost here in just a minute.

Low-cost, OK? It’s not really what they’re looking at. They’re looking at cost-efficient, cost-efficient plus high-value equals, what I say, being smart with my client’s money. I want to be smart. By the way, they love the word “smart.” Right? Smart water. Smart cars. Smart phones. Interesting.

We want to be smart with your money. Being smart, who doesn’t want to be smart? However, with this set here, we believe, that what we need to be prepared with is what we call a 30-second smart statement when anybody asks me about fees. OK? When anybody asks me about fees. So what I want to show you here, is what I call a 30-second smart talk. By the way, how many have ever been trained on how to talk about cost and fees? You’ve been to extensive training on that? If you just look around, nobody. How many of you, in your practice, have to explain or talk about fees in your practice every single day? All the time. Right? So this is kind of what we do. We find voids of, I think, information in areas and try to help you out.

So we’ve created this 30-second smart statement. Follow me on this. It’s a little script. That’s fine. Let me come back and say that.

Jim asked me the question about the fees. “So, Jim, first of all, thanks for asking about our cost. First, let me say that it’s important that we’re smart with your money. What you pay matters to us. We feel that it’s important for you to know exactly what you pay so that there are no unexpected or unexplained costs. Paragraph No. 1. As a client of ours, you should know that our ultimate goal is to make sure you achieve your financial goals. And with that in mind, we’re always looking for ways to design long-term, diversified investment strategies built within a planning process and are always looking for the most cost-efficient, high-value way to manage your money, and with that said, the costs are as follows.”

And I’m going to explain to you the reason why we construct it this way. I don’t expect you all to get this thing and have it inside of your hand when you’re saying this, but you can certainly look at this, and I want to share with you the principles behind this so that you can have a natural conversation, so, hopefully, when they’re done with that conversation, they say, “Oh, OK. I totally get that.”

So what did we do here? The first thing I do, and this is really simple, is I acknowledge a respect for their costs. I verbally acknowledge that as a respect. A couple of keys. Second, what I do is a quick, little thing of “Look at what you’re paying for. This is what you’re going to get.” It’s quick. It’s not nine minutes. It’s not seven minutes or 13 points on the value of whole life.

Remind them of the value of what they’re getting. Quickly. And then, finally, the last thing is a straightforward description of the costs. And, most importantly, whenever we coach — Suzette and I coach a lot of different teams — it’s got to be your own voice. It’s got to be you. It can’t be us.

Audience: With the straightforward description of cost, are they looking at more actual dollars or percentages? Or is there a difference there?

DeMoss: Well, it depends what you want to do with that. Percentages are basically the way that most people describe that.

Audience: I didn’t know if you had done testing on percentages versus exact dollars.

DeMoss: No, no, no. But, intuitively, what I know from listening to all these people, I would just start with my percentages. And I know that in a lot of markets, actually, I know that in Canada, they also are making you actually list what those actual dollar costs are. But you know what? If you’ve got to list it, you’ve got to list it, right?

But, again, here’s what you’re doing here. Look at what we’re saying. There’s a reason why we chose every word and every sentence here. We’re smart with your money. Ha-ha. Thank you. I like that, No. 1. [visual] This is critical. If you’re just going to say one sentence out of this whole first paragraph right here, what you pay matters. I just want you to know that. What you pay matters to us. We actually think about it. We think about this. And here’s exactly why it’s important. We feel it’s important for you to know exactly what you’re going to pay because we want to make sure that there are no unexpected and unexplained costs. I took the last part of that sentence exactly from our focus groups because what drives people crazy, and they’ll actually leave you, is that little sentence right there if they find expenses or fees that they did not know about or they weren’t expecting. That is where you don’t want to be.

And then we go into stating the value, making sure you reach your financial goals, and we’ll talk a little bit more about that. And then the planning process — we’ll talk about planning a little bit. And, of course, as we just mentioned, the word comes up, “cost,” and it’s straightforward.

This is something I hope that you take away from here so that when that comes up, I’ve got a fluid response to people about fees in my voice. The voice that matters. This seems natural, OK?

Now, let’s see. I’m going to show you a little example here of, perhaps, what can happen when we’re not prepared to have that fee conversation. Let’s watch this video. This is a good friend of mine, Scott West, and his wife, and they are Skyping with their advisor. Let’s see what happens when we encounter the individual who’s not really prepared to answer that question. [video]

Video: Scott: Can we get Robert up on Skype? And as you’re doing that, let me ask the questions. I’ve got a way with Robert to get to the bottom line of what we need. There he is. Robert! Thank you so much for taking our call. Remember my wife, Laura?

Laura: Hi, Robert. We’ve just received our statement, and we’ve got some questions.

Scott: So we’ve got questions on the statement we just got.

Robert: Well, that’s what I’m here for.

Laura: What is this 1.25 percent fee?

Robert: It covers a wide view of what we have, not only on the large side, but certainly throughout. Just realize that things are going very much to a good cause.

Scott: That’s what I wanted to ask. So what does the money go toward?

Robert: Oh, a lot of stuff. Probably more than I could even name here, but let me just do some highlights here. Things. There are a lot of things that we, and when I say we, I mean all of us, go through daily. And that adds up over time. And time, in itself, is just where they harbor.

Laura: Robert, does the fee ever change?

Robert: No. No. No. Well, I don’t understand a lot of it. This is just the way I follow. Nobody else. And it’s very personal. But as long as I’m taken care of, I mean, my clients are taken care of, I’m a happy person.

Scott: So what we’re hearing is that it’s 1.25 percent, and it may or may not change. Is it fair?

Robert: 1.25 percent is fine. If you feel the need to go whatever is in your heart will be fine with me, because granted, I have several kids and all, and I want them to go to good schools. But that’s just not here. This we do with communication, which is so important. So let your heart be your guide in your wallet.

Scott: Robert, so let’s assume that it’s fair. Do we have a list of the services that we get for the fee?

Robert: No. I know, but I think they fuss up on putting it on paper or whatever. You lose control, and I don’t like to lose control. Last time that happened, well ...

DeMoss: We’ve got to do a little brain break there, just to kind of make sure you’re all still awake, all right? So, a positive. We’re going to finish with our first principle and go through our next one here. Positive. I can talk about longevity risk and reach this number of people, or I can talk about making sure you have enough money as long as you live. I’m just going to connect with more people, trying to get across the same point.

Principle No. 1: Be positive. Do not use fear-based tactics in our approach. Suzette, why don’t you take us through our second principle?

Rothberg: Happy to. So what, obviously, is out is anything that we would define as superlatives, exaggerations, models, mansions, anything like that. Our second principle is about being plausible. It’s about being credible with our messages. Being believable. This is a business based on trust. I imagine most of you would agree with that.

So here’s an example of how we apply this. We ask, “When it comes to retirement, my top priority is what?” Comfortable? Current? Or dream? How many might say “comfortable”? All right. “Current”? Good number. And “dream”? Right? We all want a dream.

So let’s look at how this played out. “Dream” did not do very well. “Current,” a little better. It’s “comfortable.” And why is that? Why would “dream” not really resonate? Well, if we apply our second principle: plausible, credible. How do you know what my dream is? Do you know what my dream is? He’s like, “No, I don’t know what. I’m backing out of here. No, you don’t know what my dream is.” But I think it’s very plausible and believable that I would want a comfortable retirement, so that’s how we’re applying this principle.

Now, here’s our next card. [visual] So get your cards ready. This is an interesting one. We asked the question “Financial security, financial freedom, what do you want in retirement? What do you want?” How many of you think “financial security”? I want financial security in retirement. OK, good number. How many of you think “financial freedom”?

Yeah! Want to get in the RV, right? Travel the country. You don’t know what my dreams are. Let’s look at that. Now, let’s look at this. [visual] And we actually had one where we did a trend analysis because, as we mentioned, we’ve been doing this for a number of years. We follow these things over time and take a quick peek. 2007, which you’ll see. “Financial freedom,” but no. “Financial security” won out. 2009, similar pattern. Even at the bottom of that bear market. And then 2018, checking to see if it’s changed; it’s still the same. It’s “financial security.” How many of you are surprised by that? Financial security? Yeah. I’m guessing we probably lost a couple of people there, Gary. Just a couple. Just a couple.

So let’s move on. Let me ask you this question. If your financial advisor recommended you put your portfolio into a single, well-diversified fund that seeks to maximize the potential for growth while minimizing your downside risk, how likely would you do that? That’s the question we posed. Sounds reasonable, right? Sounds pretty fair. Well, what we received was a split: 50/50. So we took a look at this, applying this principle of being plausible, and added a very short phrase. We added “a portion of.” That’s all we did. We added “recommending you put a portion of your portfolio.” Look at the impact: 10 percent said unlikely; 90 percent said they were likely to do that. Why? “A portion of.” Much more believable. Absolutely.

So, next card. Get your cards out. Which investment is most appealing to you? How many of you want a “new and improved investment”? Raise your hand. New and improved. We’ve got a few. How many of you want an investment that “works as advertised”? Of course. We want things to work as we expect them to, right? Nothing is more frustrating. So I think most of you got this one right. Absolutely overwhelming response.

Think about “new and improved,” and put that in the context of 2008 and 2009. There were a lot of new and improved investments that didn’t really work out so well for people. So I think that’s a part of it as well.

DeMoss: How many of you in this room sell annuities in some form or fashion? Just annuities. If I could go back just one slide to the “portion.” I just want to add one little thing. It’s really, really critical. We just did a big piece for this for Alliance for Lifetime Income. I don’t know if you have ever seen that out there — the word “portion” when you’re talking about annuities. Or whole life insurance. Make sure you define that this is for a portion of their assets because if we don’t declare that, do you know what they think? They think that you want what?

Rothberg: All the money.

DeMoss: Everything. I’m just telling you, the portion calms them down. OK, this is for a portion. It’s a great compliment. I just wanted to add that in there.

Rothberg: Great point. It’s a smaller commitment, so it makes perfect sense. So great point to remember on that.

All right, let me jump ahead. We kind of touched on this idea of fees, but let me pose the question, What kind of fee arrangement would you prefer? So what kind of fee arrangement would you prefer? How many of you thought “transparent fees”? Yup. Transparent fees. OK, a few. How many of you thought “straightforward fees”? All right, there we go.

DeMoss: That’s pretty good.

Rothberg: You got that. So let me show you the results. There are actually three choices we provided: clear, transparent and straightforward. “Straightforward” is the winner. Now, let me give you a little background on this.

When we did our studies on this, and we tested that word “transparent,” people literally associated “transparent” with politicians who are supposed to be transparent. So it cast an incredibly negative shadow over it. If you look at the dictionary, at the definitions of these, and say, “Why would “straightforward” do better than “clear” or “transparent”? Well, “transparent” is defined as something that’s easy to perceive. Easy to perceive. “Straightforward” is easy to understand. What do clients want to do? Do they want to perceive things, or do they want to understand things? They want to understand things.

So you can begin to see how this applies. Much more believable, plausible, etc.

Audience: I feel like “transparent,” or “straightforward,” is just so overused now. So the word “transparent” and several other words in our language, say, have just become so overused. Do you have a list of those?

DeMoss: Yes. One of these we will offer is the top 10 words to use, top 10 to lose. You are spot on. The real reason why “transparent” does not work anymore is because the politicians hijacked the word “transparent.”

Everybody. There’s no party delineation. “We’re going be super transparent.” This is what they said. We said, “Why don’t you believe transparent? That seems so odd.” We hear this word “transparent” all the time, and it never happens. They hate the word “transparent,” to your point.

Rothberg: Exactly. Good point. All right, so, just to review. “Financial freedom,” we attracted 15 percent — 15 percent is who we engaged. We changed that to “financial security,” and you can see the impact. Ultimately, this is a message about what the principles are that are going to help us connect at a deeper emotional level and communicate more effectively with the individuals whom we’re speaking with.

So let me move on. Can I move on to our third principle, Gary?

DeMoss: Sure. Yeah, let’s do that.

Rothberg: So this principle — before I reveal what it is, I’ve got to show you this video. This is great. This is where we took to the streets of Chicago. [visual] Literally, we took to the streets of Chicago to ask the average person what the definition is of our financial language. Now, keep in mind that we didn’t make this super hard. We actually used the language that is in the literature and the brochures and all the sorts of things that are approved in our industry that we hand out, that they’re supposed to understand. Right?

So that’s what we did. We didn’t set up anybody. We offered them $5 for every word that they got right, so there was a little incentive in it. So take a listen to this and see. Watch. [video]

Video: Interviewer: We’re here in the heart of the Windy City to play the Finglish Challenge to see if investors understand the financial English we use with them every day. “Dollar cost averaging.”

Interviewee 1: Boy, that’s a nice term. Best guess would be they’re going to round up to the nearest dollar.

Interviewee 2: I have no clue. I’ve never seen that before.

Interviewee 3: That I know for sure. That’s like when you every month give $500 to a stock and you average into the stock every month, or mutual fund.

Interviewer: “Transparent fees.”

Interviewee 4: That’s a very good question also. I’m not sure.

Interviewee 5: Hidden fees?

Interviewee 6: Transparent fees are ones that are not given to you, and to my understanding is that, for example, a transparent fee might be part of a mutual fund’s expenses or costs that they don’t tell you about.

Interviewer: “Large-cap value.”

Interviewee 7: Investments that have a certain dollar amount to it. I’m not sure. The highest amount it would be worth.

Interviewee 8: You just pay a little more.

Interviewer: “Bottom-up analysis.”

Interviewee 9: Going from losses to gains?

Interviewee 10: You’re looking at a particular company or investment and deciding whether it makes sense rather than saying, “Does this industry make sense?” And it’ll drill down.

Interviewee 11: Analyzing things from the bottom all way to the top and see how they work?

Interviewer: No. “Open architecture.”

Interviewee 12: Open to renegotiate.

Interviewee 13: Things can change?

Interviewee 14: I have no idea what it means.

Interviewer: “Beta.”

Interviewee 15: Like a trial basis before a final release of any product.

Interviewee 16: Beta would just be a different level as opposed to the alpha.

Interviewee 17: It’s a Greek word that I have no idea what it means in the financial world.

Interviewee 18: The overall market risk as opposed to the risk inherent to any security.

Interviewee 19: Like a VCR tape or something?

Rothberg: I hope you enjoyed that. I think that is such a great reminder to all of us of just really how we get caught up in our own industry, and we think we’re speaking in English, right? And, actually, we’re not. And so that really is the point that we want to make. What’s out there is jargon. And I think there’s this myth that if we spew a lot of jargon, we’re going to come off as very knowledgeable, sophisticated, just excellent in our industry, when it’s the furthest from the truth.

I was coaching this advisor and I said, “Well, walk me through your investment process.” And he said to me, “Well, here’s what I do. I study the inverse correlations between various asset classes, and then I have a tactical overlay.” And then I said to him, “Gary, is there a reason why you’re not getting invited to more parties or something?” Right? We have to drop the jargon.

I think of Warren Buffett. Isn’t he a great communicator? Probably revered, respected by the individual investor? And he doesn’t talk about price-to-cash, price-to-book. What does he talk about? Yeah, he likes to invest in big castles with great leaders inside who are surrounded by deep moats. I don’t have to know about price-to-cash or price-to-book. I know exactly what he’s talking about. See, that’s what we need to embrace — this idea of plain English.

So, as you saw, we asked the question, “What is most appealing?” We gave them these choices. I think the video already tipped you off, right? So dollar cost to averaging. What do they think in the video? You’re taking money from me, right? Rounding up to the next dollar. Furthest from the truth and, ultimately, was automatic, monthly investing. It’s following our third principle of plain English. If I invest money automatically every month, that describes it as opposed to a term that our industry created and is asking us to use, and we just continuously use even though nobody knows what it means.

So, plain English. Let me ask the question. We asked this question: “Which interests you more?” I’ll pose it to you guys. It’s not one of your cards, but what would you say? How many of you say “investment income”? I want investment income. How many might say, “I want a retirement paycheck.” Anybody think “nest egg”? That was big. A nest egg.

Let’s take a look at the results, and I’ll share with you. It surprised me, I’ll be honest, when we did this. “Nest egg”: 17 percent. Now, this is the part that surprised me. I thought, for sure, “retirement paycheck.” Just like all of you. I thought that was the winner. “Investment income.” Now, why didn’t they like “retirement paycheck”? They said, “Well, it reminds me of going to work, which isn’t really what I want to do at retirement.”

“Nest egg.” People were actually offended. They were offended. Right, Gary?

DeMoss: Yeah.

Rothberg: With the idea that this …

DeMoss: The money is an egg.

Rothberg: Yeah, and you’re going to crack into it at retirement. So, again, if we apply our principle of plain English, it works. Yes.

Audience: I also think that they might think “retirement paycheck” might mean “social security,” which they’re not sure is going to be around.

DeMoss: Yeah. It could be.

Rothberg: Yeah. It could be.

All right. Before we do this part, let me just check in. I’m curious, Gary. Are you curious? How many people, at this point, still have all their cards correct or were still in the running? Raise your hand high.

DeMoss: Right there.

Rothberg: One.

DeMoss: Anybody else?

Rothberg: Anybody else? Stand up, sir. You’ve got it right; come on, stand up.

DeMoss: Who’s got it right?

Rothberg: Who’s got it right?

DeMoss: There. There we go. Right there in the red.

Rothberg: All right. We’ve got to give him a round of applause. No pressure, but all eyes are going to be on you at this point.

So let’s look at this one. Here we’re asking the question, “Which type of strategy would you most like to hear about from your financial advisor?” So we posed a few. We actually have four here. “Short-term,” “opportunistic,” “long-term,” or “recovery”? How many think “long-term strategy”? OK, good.

Audience: You’ve got to make it last.

Rothberg: Yeah, right. How many think “recovery strategy”? OK, so we have a couple there. Here we go. “Short-term”? Seven. “Recovery”? It also didn’t really test as well as we thought. “Opportunistic”? “Long-term strategy”? All right. And our gentleman, I think, is still alive.

DeMoss: He’s still with us. I’m watching him. I’m watching him.

Rothberg: So, again, remember when you’re thinking about what you should be using and default to plain English. That’s the principle that we really want you to walk away with. One more set of cards. And we are going to share with you, as Gary mentioned, an entire resource that is available to you. Words to use, words to lose. It’ll give you all these words as well.

So, plain English. Two choices. The question was, “Which of the following investment strategies is most appealing to you?” Which one is the most appealing? One that is diversified? How many of you thought “diversified”? Excellent. How many thought “correlated to the market”? I kind of gave that one away, I think, a little earlier with my story. But “diversified,” “disciplined,” “focused,” “predictable,” and you can begin to see that that word “diversified” is so powerful. So powerful. It stays in vogue. It’s timeless. So when in doubt, embrace that word. That is the go-to to use.

We’re getting down to the wire here. So our friend is still alive, right? Yeah, he’s good. Thumbs up. OK.

Which of the following do you most want to hear about from your financial advisor? Several choices. Do you want to hear about investment advice? OK, that seems plausible; it’s plain English. Investment solutions? Sounds like a good option. And how many chose “investment solutions”? OK. “Investment opportunities”? They’re all seemingly good options. And “investment strategies.” How many “investment strategies”? Show of hands. OK. Here we go.

“Investment opportunities”? Not as hot as we thought. “Investment advice,” “investment solutions,” “investment strategies.”

Anyone take a guess.

DeMoss: That’s the one that trips everybody up right there.

Rothberg: Did we lose ...?

DeMoss: Yeah, we lost him.

Rothberg: Aww, I’m sorry. There went that new car. I’ll just have to drive it home. Question. Anyone take a guess. Why strategies over solutions? Now that we think about ...

Audience: Solution implicates a problem.

Rothberg: Right.

DeMoss: Oh, very good. You haven’t seen this before, have you?

Audience: No, but it hit me as you were coming to it because that’s what…

DeMoss: Oh, you’re spot on. Smart man. It’s the first time anybody’s ever got that right like that.

Rothberg: What this gentleman said is that solutions, say, investment solutions, which we see used a lot in our industry, implies you have a problem.

You have a problem. Nobody likes to have problems, right? So a more positive framework in plain English is “investment strategies.” I want to provide an investment strategy for you to maximize that gain and build on that.

All right, which investment do you believe is less risky? One that has over 1,000 securities? How many people think over 1,000 securities might work? There’s no card on this one. Anyone think “low historical correlation”? No. “All major asset classes”? OK. Good. “Stocks, bonds and commodities”? All right. Let’s see what we’ve got.

“All major asset classes.” A little better. But the winner is “stocks, bonds and commodities.”

Audience: Actually, I manage a $150 million of stocks and bonds, and I use the word constantly because people understand stocks. They see it on TV every day. But when we talk about asset classes, which we know, asset classes for them is very technological.

Commodity, gold and stuff, stocks and bonds, everybody knows that.

Rothberg: They know it. It’s plain English, right? It’s plain. It’s easy to understand. Exactly. Thank you.

DeMoss: To add on to what you were saying, we tested each one of those individually, and you’re spot on. That’s what they like because it’s plain English to them.

Rothberg: Plain English. Thank you.

All right, I’m going to just throw this in and actually just a quick couple of the ones I take them through when using charts. [visual] How many of you use charts and illustrations when talking to clients? Most of us have something we might use.

We’re taught, I think in preschool and kindergarten, show and tell. Show, then tell. And what I would suggest to you, and what we know, is it’s not show and tell; it’s tell and show. It’s tell and show. Because if I give you this chart, what are you immediately going to do? What are you going to do?

You’re going to look at the chart. And are you listening to me? Not really listening to me. You’re probably going, “Well, why is this line red and this one blue? And I’m not sure what that is.” Instantly, our mind starts dissecting that chart. What we would suggest is you explain, you tell, you make your point, tell your story. Then you provide that chart, and that chart comes afterward, which provides the validation of what you’re saying. It’s a proof point, if you will, and reinforces your message. Don’t forget, too, to take a moment to explain: “See, these are the blue bars; these are the red bars; and this is what this line means,” and label it for them to take people through. So just a quick add-on and then one more because I couldn’t resist.

Now, you may not know or realize this, but this whole research effort, in terms of the words studies and the language studies we’ve been doing — we’ve been doing actually on a global basis. And, Gary, I think you’re off to Japan next week.

We’ve done it all over the world, and I think it’s just a humbling reminder to us, right? That, internationally, we have to be even more careful, don’t we? We ran into a couple things. This is from an airline in Copenhagen. I just want to share it with you.

Look at this. [visual] We take your bags and send them in all directions. [visual] All directions. I love this one, though. This is a menu at a Swiss restaurant. [visual] “Our wines leave you nothing to hope for.” Just a little misinterpretation, right? Commonly done. So all of this is to very simply and succinctly make the point that plain English is our third principle. That, when in doubt, lean toward that. So, if we say “not correlated in the market,” we’re going to attract 2 percent. Horrible. But if we say “diversified,” something people know and understand and have come to know, we get a much larger market share.

So I’m going to turn it over to you, Gary, to bring us home.

DeMoss: We’re going to be finishing with the last principle. Here’s what’s out: generic conversations. What is in are personalized potential benefits. It’s personalizing the message to our client. I want to show you a video here. Again, dials. They’re going to start at 50. Anything above 60 is great; anything below that is not so great. Let’s see if you can see what we did here to move the dials in the direction that they move. Let’s watch this video.

Video: If you come to me with concern about something happening in the market or around the world, my job is to put it in the context of you. I believe we should take a step back and talk about where you are in your financial plan. Because it’s not about a payment. It’s about your individual goals and how this risk could affect them. So the first thing that I’ll do is work with you to determine your exposure to this risk. How it could, or could not, affect you personally. I would give a realistic assessment and have those tough conversations with you, so you won’t be caught off guard. And, lastly, I think it’s important to analyze and bring to life the potential benefits of any choice you make.

DeMoss: All right. What did we do there? Anybody pick it up?

Audience: You.

DeMoss: You. Your. You. Your. We overemphasized the personal pronouns of “you” and “your.” This is the actual narrative. Look how many times we used “I.” It doesn’t mean you can’t ever use “I.” Oh, by the way, has anybody ever had to go to a dinner and sit next to the “I” focused person? It’s like I’ve done this and it’s all about me and when I’m tired of talking about me, would you talk about me for a while? Have you ever been around that kind of person? They’re not a lot of fun to be around. But this is exactly what we did here; we populated this with “you” and “your,” “you” and “your.” Great reminder for marketing literature, if you’re writing bios, if you’re writing on LinkedIn, anything. They love it because it makes it all about them. It makes it feel personal.

We asked this question: “Which of the following statements would you most want to hear first from your advisor?” Is it their current situation, markets, the markets, or our firm’s research about what’s going to happen in the future? And take a look at this. It’s about your personal situation. Every slide I’m going to show you here puts an emphasis on the individual, on their own situation. [visual]

OK, here’s the next one. This is kind of an interesting one. [visual] What do clients like about this financial planning statement? I’m going to play it. Another video here. Let’s see if you can figure out what we have actually done here. Here we go. Dials are set at 50.

Video: I’ve been in this business a long time, and over time, I’ve developed a process for working with my clients that puts them in the best position to succeed. The first step of that process is asking the right question to get a picture of your financial situation and where you are today. The second is understanding what your goals are for the future. The third step provides an honest assessment of how attainable those goals are. Which goals are most realistic? Which are your priorities? The fourth step is to explore what actions we need to take to get there. Then, finally, we have a conversation about how comfortable you are with those actions. Are those things you think you can do? How can we help you stay on track? We’ll build on this conversation at every check-in. Having a tried and true formula like this provides a firm foundation so you know what to expect and can feel confident that we’re being thorough.

DeMoss: So, again, dials in the 80s there, OK? And I think if I ask you what we did, let me just highlight this for you very quickly. We did three things. We asked the right questions; we gained agreement on realistic goals; and we told them we’re going to make adjustments to meet their goals. We put “you” and “your” in there.

Can I just say one thing? That any time you’re going to start off any kind of a product recommendation, the first line out of your mouth is “What I’m about to talk with you about, we believe, I believe, will help you achieve your own personal goals.” I don’t normally make grandiose statements like that, but I know every time we say that, they’re going to start feeling good about your message. We remind them that this is about their situation and their goals.

Which advisor do you prefer? Is it one that you get 8 percent but has no time for you? Or 6 percent and has all the time for you? You know where this is going. They’ll take less returns if they feel that you can make a more personalized effort and make it about them. They do appreciate the personal service, and they’re willing to sacrifice some return for that. Answer, yes.

What would you be likely to put your entire portfolio into? What is it: a target date fund versus what it does for them? This just shows you the power of a benefit. When I lead with the words “whole life,” what do you think they do? They go, “I don’t want that.” But when you talk about, first of all, what whole life does for them, and then you mention that it’s whole life. I know probably many of you are already doing that right now, and it makes a huge difference. Tell them what it does before you tell them what it is. OK? Minor piece here.

Last card. How many had “knowledgeable”? How many had “experienced”? We asked, “Which of the following attributes do you most want to see in your advisor?” And it is the word “knowledgeable.” Knowledgeable. And we got this question a lot: “What do you mean by ‘knowledgeable’?” What does that really mean? I thought they liked experience. They do like experience, but here’s what they like about knowledge, and it’s very simple. The very bottom answer here is that they understand that their knowledge is about me. They understand my personal situation.

I can’t emphasize that enough with great conviction and great passion. We need to make sure that all of our communications are really about them. So we can talk about what it is and connect with this many people, or talk about what it does and connect with a much greater amount of people.

So there we go. Those are the four principles. Be positive. No fear-based. Make sure that our benefits are believable to the client. Make sure that we do the best we can to use plain English in front of our people, and make it personal. Apply this not only to conversation, but take a look at your marketing literature, anything on your social media, and these four principles will apply.