Exactly 25 years ago a British ad campaign for a wood varnish succeeded beyond the wildest dreams of the manufacturer.
Ronseal’s “It does exactly what it says on the tin” campaign turned the conventional marketing campaign wisdom upside down. Instead of promising extraordinary outcomes, the ads’ mundane promise was: this is what you want, so this is what you get. It junked the jargon and left consumers clear about what they were buying.
Sales rocketed, the campaign slogan became one of the most recalled in history, and “it does exactly what is says on the tin” entered the British English vernacular when describing a person, product or process that delivers. It’s even been adopted by political leaders in much the same way ad slogans like "Where's the beef?" have been deployed by politicians in the US.
The financial services industry tries to take the same approach, offering products that deliver as the buyer hoped. But one area where there is still some ambiguity is in the terminology used to define risk tolerance levels.
Terms like “conservative,” “balanced” and “aggressive” are commonly used to define different risk tolerance levels in multi-asset investment products or indexes, but without objective data to back up these definitions.
The risks of this ambiguity are clear: investors may realize too late that an index or product they have selected is far from their own expectation of the level of risk tolerance the name seemed to imply. In investments, as in other spheres of life, what seems “moderate” through one pair of eyes can be “conservative” in another’s.
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