Rekenthaler Report

Word Doctoring

John Rekenthaler

Say What?
Now here's an intriguing headline: "Invesco Reveals Worst Words to Use with Investors." (The article from Ignites is behind a paywall, sorry.) What's more, the source of Invesco's insights was research from a firm where my former college roommate, the (in)famous Frank Luntz, once worked (maslanksy + partners, formerly maslansky luntz + partners. One needn't agree with Frank's politics to acknowledge that the author of the term "death tax" is a master at messaging and that his former firm probably has a knack too. What Orwellian language did the consultants suggest for fund companies?

Not much--at least as publicly disclosed by Invesco, the findings are noncontroversial. But they are useful. Consider the tricky item of informing fund investors about what they pay. A test audience was asked which it would least enjoying paying: fees, commissions, charges, or costs. Respondents were 9 times more likely to say fees rather than costs. After all, the first three items sound like mechanisms for boosting fund-company profits. Also, they are arbitrary. A fee, commission, or charge is set at the level that a fund company desires. Costs, on the other hand, merely imply what the fund company must recover to pay its bills.  It's only fair that the companies be able to recoup their costs of operation, no?