Nov 02, 2021

In a recent article, I outline the challenges investment firms are having with their commentary creation and process. Key challenges include deciding who should write commentary and where to store approved commentary. In this article, I outline some new approaches to commentary writing. With natural language generation (NLG) technology still not ready for use for most firms, here are three steps that firms can take to make the commentary process better for themselves and clients.

1. Use the Template to Guide Readers

In today’s fast-paced world, attention spans are short. When it comes to reading, many of us are really “skimmers” rather than “deep divers.” Firms that produce great commentary use methods that make the layout of commentary easier for readers to grasp the information.

Headings vs. Headlines

It’s helpful to give readers a quick preview of topics in commentaries. There are two approaches ─ using headings and headlines. Headings are short phrases that describe the topic. Headlines, on the other hand, convey a quick synopsis or a key message, allowing the firm to highlight the key message it wants clients to know before they read the more detailed commentary. Headlines make sense when your firm wants to interpret the message, while headings work better when space is at a premium.

Headings provide a title that indicates the general subject of the commentary section.

Headlines give a quick synopsis or key takeaway, allowing clients to understand the gist of the commentary section without requiring them to read it.

Paragraphs vs. Bullet Points

Investment professionals tend to be verbose. Although they want to take investors through all the details, this approach often just confuses investors. Paragraphs are more conducive to conveying a series of connected thoughts ─ that is, telling a story. Paragraphs can handle formal and informal tones, and are optimal for sharing opinions and often used for higher level commentary segments such as market outlooks.

Replacing paragraphs with bullets can be a great way to make commentaries easier to read, but there’s a correct way to go about using bullets. Bullets can accomplish the following:

  • Easier to read and digest; preferred format for “skimmers”
  • Optimal for managing page space
  • Often used for detailed commentary segments such as performance attribution analysis


Investors appreciate the ability to know where to find relevant content in commentaries. If a CIO wants to know what an investment team thinks about the current economic outlook or views on valuations, it’s a difficult experience if they must go looking for this information each quarter or month. Consistency helps not only the reader, but those writing it, too. Authors know what they must write and how much space is allotted to share their views. Consistency encourages clear and concise writing.

2. Unbundle the Parts

Another approach that firms are leveraging to improve commentary writing is “unbundling,” where commentary is broken down into smaller segments that can be assembled in various ways. This is similar to what many of us learned in high school chemistry class ─ we’re treating commentary like a compound that is made up of its elements. Just as water is made up of two hydrogen atoms and one oxygen atom, commentary usually is made up of multiple types of statements or components (e.g., review of market, review of portfolio performance, market outlook). Some of these components are specific to clients, while many are oriented to asset class or investment strategy.

To unbundle commentary, firms need to take a different approach to authoring, approving, and storing commentary. Unlike authors today who generally write commentary on an end-to-end basis for an account, unbundled commentary requires a firm to think about the types of messages, where they are the same account to account, and where they differ. Where they are the same, the commentary is written once and where they are different, they require the flexibility to change (e.g., show different benchmark, attribute outperformance to different securities).

Benefits of Unbundling

By unbundling commentary, a firm can achieve the following:

  • Scale commentary by having non-client-specific text that can be used in materials for multiple accounts
  • Assign commentary segments to individuals best suited to write that piece of commentary
  • Ability to review and approve commentary at a faster pace
  • Assemble commentary segments to adapt commentary to the audience
  • Ability to deliver client materials sooner to clients

3. Adapt to Audiences

Step back from what you as an asset manager or wealth manager want in a client report, and think about what your investors need to know from you. Your commentary’s depth and breadth should align with your clients’ financial acumen, the nature of your investor relationship with them, and the topics that interest them the most. For example, how your firm contextualizes recent portfolio performance will be different for an institutional investor versus an individual mass affluent investor. The institutional investor is going to expect deeper analysis showing that you add value in the way you said you would (e.g., performance attribution, risk analysis). Conversely, a mass affluent investor would likely be confused by the investment industry jargon. Mismatched commentary content leads to confusion and often triggers more questions by individual investors to their relationship manager or financial advisor.

Commentary is only one of the key components in a client report. To help firms understand the strengths and weaknesses of their client reports, Cutter Associates now provides a Client Reporting Assessment service. The assessment evaluates your client reports and compares your reports against the industry and best practices.

If you have any questions, or would like to speak with a client reporting specialist, please contact us at [email protected].