Story vs. Process: Blending Strategies for Investment Clarity


How do you connect with investors, with a well-crafted story, or cold hard facts?

Over the last 25 years in the investment industry, I’ve come to realize that there are two types of advisors – storytellers and process disciples.

While working toward the same goal, both communication styles look starkly different, like two pieces of a puzzle.

I’m convinced that if they were put together, we would have a more complete investment discussion a key to keeping clients during periods of financial stress.

The Storyteller

When describing investment strategy, storytellers like to connect with clients with a big-picture view. You provide a pathway for the investor to envision what you can do for them, without becoming too “technical”.

The storyteller talks about goals, dreams, long-term cycles, and their favorite investment themes that promise to guide clients to their destination.

The Process Disciple

Process disciples are more likely to focus on the hard facts - keeping the end game in perspective - and provide parameters through which an investor can systematically discover the best investment strategy.

The process disciple relies on robust investment tools and data, such as risk assessments and performance charts to direct clients through investment decisions.

The Clarity Issue

The issue is while each strategy can effectively resonate with certain investors, we are only telling part of the story. And with any incomplete story, the audience is left with uncertainty – a significant barrier to trust and adoption.

Blending Strategies to Strengthen Your Pitch

It’s time to put the two pieces together – a compelling story and data-driven process – to resonate with investors on multiple levels.

That’s why we created Market Movement Strategies (MMS), the strategy that links each piece of the puzzle to tell a compelling investment story rooted in data.

Grounded in a 2010 study, revealing the impacts of market movement on underlying asset return variance, MMS helps you deliver a data-driven investment process. Using a robust risk assessment that identifies investor behaviors in particular market cycles, MMS relies on an objective process to optimize asset selection for each client.

It also provides a powerful story that investors can easily understand.

To adjust market participation for each client, MMS implements a 3-mandate approach. Each portfolio is constructed with a blend of three independent strategies for a more tailored investment experience:

Strategic - assets that provide full market participation

Tactical - assets that seek tactical opportunities in sideways markets

Diversifiers (Liquid Alternatives) - assets with little to no correlation to the market

Taking market movement into account allows you to better guide clients through cyclical market trends. Insulating clients from volatility, MMS positions you to help investors more comfortably and reliably achieve their long-term financial goals.

A Better Investment Story

Beyond encouraging objective investment decisions, MMS helps you differentiate with a more compelling and understandable investment story.

There is a place for both storytelling and process in investing. Each resonates with investors, satisfying equally important requirements for adoption. However, neither strategy is optimized to fully resonate with investor needs, alone.

It’s time now to strike a balance with our clients, implementing right-fit tools and holistic strategies to help empower growth.