And having the "fee" conversation can be a daunting task.

It's not just about what you say; it's about how you say it

We teamed up with the political consultants and word specialists, Maslansky + Partners, to conduct one of the largest, most comprehensive studies of its kind on financial language.

The research included measuring investors' emotional response to words using a unique instant dial response technology.

We then conducted a national survey to validate our findings, and found that the word "fees" provoked negative emotional reactions. The word "costs" had a more positive emotional response.

Here's a very relevant example of how word choice plays an important role when communicating with plan participants:

Word choice is important when communicating with plan participants:

As you know, plan sponsors are required to fulfill fee disclosure requirements by providing participants with information they need to know — but aren't required to read.

So why not use language that gets a positive response?

People better understand "costs."

Anything of value costs something, but fees are seen as surcharges that don't provide any benefit.

So when we say "fees," that's what they hear.

Investors feel like "clear" is accurate but not necessarily complete.

"Transparent" is like a prospectus — it contains all the information but is not understandable.

That word has also been hijacked by presidents who promised to have a transparent administration then went into closed door sessions.

However, "straightforward" implies that an arrangement is honest and understandable. Imagine how this resonates to employees.

Just one word could be the difference between making a positive connection with 20% of the participants, or nearly three times as many.

Bottom line

Help participants better understand the value, services and costs of their retirement plan so they may better understand the benefits associated with those costs:

• Use plain language to promote trust and encourage employees to use their DC plan more wisely.

• Substitute "plan costs" for "plan fees" and "straightforward" for "transparent" to obtain the best response from participants.

"The Language of Fees" is based on the book, The Language of Trust: Selling Ideas in a World of Skeptics, by Michael Maslansky with Scott West, Gary DeMoss, and David Saylor (2010) published by Prentice Hall Press. The Language of Trust: Selling Ideas in a World of Skeptics is based on Invesco Consulting's "New Word Order" program, which is derived from our firm's ongoing research with Maslansky + Partners. Invesco Distributors, Inc. is not affiliated with Maslansky + Partners."

This material is for illustrative, informational and educational purposes only. We make no guarantee that participation in this program or utilization of any of its content will result in increased business.

Invesco Distributors, Inc. US7601