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Much Depends on Your Perspective

Did you ever receive a business communication that made you scratch your head and wonder aloud what “they” were thinking? I like to think that I am used to being able to make sense of communications that are sloppy, ill-advised or flat-out wrong. Also like to believe that I can eventually get the point and not take statements as an insult to the reader’s intelligence or worse.

So recently I was surprised to first be angry and then disgusted at communications received from a very substantial and well-thought of non-profit organization. Actually, that is wrong, the first communication made me laugh in a how could anyone pay attention to the letter kind of way. That first communication stated that the organization was increasing its administrative charge from 0.07% to 0.09% annually. Now that seemed ridiculous because the amount is small and pretty clearly far below any usual and expected cost. Having worked as a financial adviser charging clients an annual percentage fee for a bundle of services including investment management, planning and advice, as well as administration, I knew it made no sense.

A week or so later came a follow-up letter from the same “executive” apologizing for the “inaccuracy” and making the change from 0.7% to 0.9%, characterized as a “slight” increase. Well I am not sure where that executive came from but in my world a nearly 30% increase in the cost of something is NOT slight. That characterization was of course annoying but the real anger came after reading the next couple of lines. The letter stated that the non-profit, having found that its peers charged more annually for their services, was therefore increasing its charge. No explanation of any additional or improved service to be offered the customers, no justification of the higher charges of the peers, no differentiating the non-profit from its peers for better cost or service. No. The sense was that they raised the fees because they wanted more money. No connection to the mission – which as a non-profit was to serve others – just a diversion of more money away from the true purpose of the organization.

Now that was offensive. When put into perspective from my point of view it was even worse. The organization charges its administrative fee IN ADDITION to its investment management fee. Most financial advisers I know of – for-profit firms, no less – charge lower fees to provide their bundle of services which goes much further than what the non-profit provides including the investment management. Now that is arrogance on the part of the so-called non-profit.  

Of course, argument could be made that the organization needs to hire an editor and train its people better in making communications and that effort does cost money they obviously do not spend now. The first letter was wrong on a very material – in fact the central – aspect of the communication. How did that get out? The second letter, repeating the first for the most part other than correcting the fee change information, was also accompanied by a cover letter purporting to apologize for the “inaccuracy”. Both fee letters used an insulting claim to increase fees because "everybody else is doing it". 

Other than greed, I wonder what the organization had that from its perspective would make all this reasonable?

 

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