In early February, I had the opportunity to attend an hour long sandwich luncheon hosted by a successful downtown Toronto partnership in their boardroom - in addition to me, there were twelve clients in the room. The purpose of the lunch was to provide perspectives on recent markets and introduce an analytical tool which this team had recently adopted to help screen stocks.

There was lots to like about the lunch. The advisors presenting were clearly comfortable, engaged the audience and presented some interesting perspectives on where the market had been and where it stands today. They generally stuck to the timeframe and did a good job of explaining the significant investment they'd made in their new tool and outlining how it benefits clients. There was just one area that stood out for me as needing improvement - one which they share with many advisors.

Every profession has jargon that makes absolute sense to practitioners but is impenetrable to outsiders . Few, however, match the investment industry in tossing inside lingo around when conversing with clients - what one investor I talked to described as "bafflegab".

The presentation I attended featured quite a good explanation of market breadth and why it matters. Unfortunately, this was followed by a chart showing the extent to which the market has been "oversold vs overbought" over time - I'm still not sure quite what that chart meant and if I wasn't clear can say with confidence that few of the clients in the room did either. An additional term that I suspect left many clients scratching their heads was a reference to a stock "beating consensus estimates". Yet another irritant was repeated reference to "names" that were owned rather than companies or stocks.

Even phrases that we consider basic such as large cap vs small cap stocks, growth vs value investing, market capitalization and PE need to be explained to many clients. And as a general rule, without explanation, you can't assume that even experienced investors will know what you mean when you talk about something as basic as the PE multiple for a stock or mutual fund. There's nothing wrong with using technical terms to make your point - and some clients like to walk away from a conversation having learned something new - but be sure that you explain what terms mean as you go along.

Some advisors believe that if clients aren't sure about a phrase they'll ask. That couldn't be further from the truth - generally confused clients will stay silent. Instead, rather than listening to you, they'll reflect on what that expression you used could possibly mean and will often walk away vaguely uncomfortable that they don't know something which they should and even worse "feeling stupid".

Some years back, there was a push to go to "plain language" in prospectuses and other industry documentation. Advisors should make the same commitment to plain language in your business. Scrub industry language and technical terms from your communication with clients and prospects. Before sending them out, show newsletters and client letters to a friend or relative not in the business and ask them to circle all the words they're not sure of. Compile a list of buzzwords that you have a tendency to use - and make a point of avoiding them in conversation. Do all this and you too can do a better job of communicating with clients.