Warren Buffett once said that investing is part art and part science.  The marketing of financial services is also part art and part science, but the majority of those marketing financial services put far too much emphasis om the science. Which is not only boring clients to death, but, because financial professionals are all using the same scientific charts and facts, have begun to sound like every other financial service provider out there.

Warren Buffett: The World’s Greatest Investor… or the World’s Greatest Financial Storyteller?

Warren Buffett once remarked that investing is part art and part science. That simple observation contains one of the greatest lessons for every financial professional.

The marketing of financial services is also part art and part science.

Unfortunately, most financial professionals spend almost all of their time mastering the science.

They know the tax legislation.

They know the investment models.

They know the pension rules.

They know the insurance products.

They know the performance charts.

And they know the latest economic forecasts.

The problem is that their clients don’t.

Even worse, their clients don’t want to.

Clients rarely wake up wondering how a Monte Carlo simulation works. They don’t discuss asset allocation over dinner. They don’t become excited by tax-efficient withdrawal strategies.

They want to know one thing:

“What does this mean for my life?”

That is where art begins.

Scientific knowledge builds credibility.

Stories build understanding.

And understanding builds trust.

Warren Buffett has understood this better than almost anyone in the financial world.

For more than sixty years his annual letters to Berkshire Hathaway shareholders have become required reading—not because they are full of financial jargon, but because they are full of stories.

He almost never explains a difficult investment principle with complicated formulas.

Instead, he tells a story.

Or he uses an analogy.

Or he paints a picture everyone immediately understands.

One of Buffett’s most famous observations is:

“Only when the tide goes out do you discover who’s been swimming naked.”

One sentence.

No graphs.

No statistics.

Yet everyone understands immediately what he means.

When markets are rising, weak businesses and poor decisions remain hidden.

When markets fall, reality becomes visible.

That is storytelling.

Another Buffett classic is:

“Price is what you pay. Value is what you get.”

Again, a complicated principle from finance becomes a sentence a twelve-year-old can understand.

Or consider his advice about risk:

“Risk comes from not knowing what you’re doing.”

Notice that he never says risk equals the standard deviation of returns or explains beta coefficients.

He talks like a neighbour.

He talks like a teacher.

He talks like a storyteller.

Perhaps my favourite Buffett metaphor concerns reputation.

He once said:

“It takes twenty years to build a reputation and five minutes to ruin it.”

Every business owner remembers that sentence.

Every entrepreneur understands it.

No technical explanation required.

His annual shareholder meetings have become known as the “Woodstock for Capitalists.”

More than forty thousand people travel to Omaha each year.

They don’t come to see spreadsheets.

They come to hear stories.

They come to hear Buffett explain complicated economic events using humour, common sense and everyday examples.

That is why millions of people trust him.

Not because he knows more than everyone else.

But because he can explain more than everyone else.

Financial professionals often ask me how they can become better communicators.

My answer is simple.

Study Warren Buffett.

Not his investment portfolio.

Study his language.

Notice how often he begins with an everyday situation.

Notice how often he compares investing to farming, baseball, marriage, bridges, snowballs or simple household experiences.

His favourite teaching device could almost be summarised as:

“It’s kind of like…”

“It’s kind of like planting a tree.”

“It’s kind of like buying a farm.”

“It’s kind of like building a reputation.”

Suddenly everyone understands.

That is exactly what highly successful financial professionals do.

Instead of saying,

“We recommend diversifying your asset allocation across multiple uncorrelated investment classes…”

they might say,

“It’s kind of like not putting all your eggs in one basket.”

Instead of discussing inflation-adjusted retirement income projections, they might say,

“It’s kind of like filling a water tank that has to last for the rest of your life.”

The client immediately sees the picture.

The science has not disappeared.

It has become understandable.

Albert Einstein reportedly said:

“If you can’t explain it simply, you don’t understand it well enough.”

Whether or not he said those exact words, Warren Buffett certainly lives by that principle.

He proves year after year that simplicity is not the opposite of intelligence.

Simplicity is the highest form of mastery.

Financial services professionals are already experts in the science of banking, investing, insurance and financial planning.

But an exclusively analytical approach has become a half-brain approach.

When we become trapped inside technical language, we unintentionally intimidate clients.

We speak in acronyms.

We present endless charts.

We overwhelm people with percentages.

We confuse information with communication.

Clients politely nod.

Few truly understand.

The best storytellers do something different.

They translate complexity into clarity.

They replace jargon with metaphors.

They replace statistics with stories.

They replace products with possibilities.

Every great client conversation eventually contains the phrase:

“It’s kind of like…”

Because the moment a client says,

“Oh… now I get it,”

that is the moment advice becomes valuable.

In this seminar, we will explore dozens of the stories, analogies and metaphors that exceptional financial professionals use every day.

Not because stories replace expertise.

But because stories unlock expertise.

Science tells people what they should do.

Stories help them understand why they should do it.

And people act on what they understand.

That may be Warren Buffett’s greatest investment lesson of all—not about money, but about communication.

Financial services providers are familiar with the science of insurance, banking, investments. However, an exclusively analytical scientific approach in explaining and selling financial services has a half – brain approach and, in fact, may be counterproductive. It may be counterproductive because when we get caught up in any form of analytical science, we begin to speak in jargon, which tends to confuse and intimidate most people. Many financial services providers are spewing jargon and cliches to uninitiated clients and don’t realize the confusion and intimidation they are causing.

Highly successful storysellers have learned to simplify complex financial services strategies and products. They have learned to relate these strategies and products to matters their clients can understand by using the phrase ‘It’s kind of like’.  In this seminar we will share many of the stories, analogies, and metaphors that these successfu financial professionals use to their own benefit and the benefit of their clients.

Warren Buffett is an excellent example of a natural storyseller. If you’ve read any interviews with, or books about Buffett or read any of his letters to Berkshire Hathaway shareholders, you have seen his instinct for stories, metaphors, analogies and anecdotes. His mind works this way and his shareholders appreciate it. He makes complex ideas understandable to people who are not versed in financial matters. This should be a primary communications goal of any financial services professional.

You can contact Peter at peterdekuster@hotmail.nl