New research-based language study measures investors’ emotional reaction to common real estate investing words and phrases


ATLANTE, September 13, 2022 /PRNewswire/ — According to a new year-long study titled, building Opportunities: The Compelling Language of Real Estate Investment Trusts from Invesco, a leading global investment management firm, and Maslansky + Partners, a research-driven language strategy firm, many common words and phrases used in real estate conversations today can be insufficient when used in discussions with investors. One reason may be that while most finance professionals understand the importance of including potential benefits in client communications, many don’t know how to articulate them using words that resonate fully with investors. .

“It is important for finance professionals to effectively communicate with their clients the potential benefits of real estate investing so that they can understand their investment choices, and research has confirmed our long-standing belief that the choice of words is important when introducing real estate investment trusts (REITs). said Paul Brunswick, head of Invesco Global Consulting. “While most investors surveyed had a favorable view of real estate investing, their views shifted depending on how certain concepts were presented.”

Phrases to use when talking about REITs

Based on extensive research using instant response technology, Invesco Global Consulting found that 60% of investors believe now is a good time to invest in real estate, but only 46% said they were likely to investing in real estate.1 This gap can be attributed to investors not understanding the role that real estate can play within a portfolio. Given this, it is crucial for finance professionals to clearly articulate the potential benefits of REITs for clients.

Invesco Global Consulting researched how best to articulate the key benefits of real estate investment trusts in a study of 500 accredited investors. Research has proven that word choice can impact the magnitude of potential customer benefits. The following list of phrases has been presented to help finance professionals highlight the potential good benefits of REITs when speaking to clients:

“Words to use”

“Words to Lose”

  • “Regular rental income”
  • “A portfolio invested in different markets”
  • “A portfolio invested in different properties”
  • “A source of income that can grow to outpace inflation”
  • “SCPIs more stable than shares”
  • “SCPIs less volatile than equities”

Investors love plain language when describing the potential benefits of real estate

With interest rates rising, finance professionals can explain to clients that REITs are a potential way to defend against inflation. When asked what they would prefer to add to their portfolio to protect against inflation, 24% selected “an inflation hedge”, while 76% preferred “a source of income that can increase to get ahead of inflation.1 The term “hedging” is not a potential benefit per se, and investors often view the term in a negative light.

“We believe it is important for finance professionals to better understand investment communications from the client’s perspective, and with this knowledge they can better communicate alternative real estate investments to their clients,” Brunswick said. .

Misconceptions about portfolio diversification

Historically, retail investors have allocated only a very small portion of their portfolios to alternatives, even though the asset class has potential diversification benefits. When it comes to the benefits of REIT diversification, 44% of accredited investors believe that “full” diversification works better than “true” diversification (29%) and “enhanced” diversification (27%). Of the 500 accredited investors surveyed, only 16% felt diversification was an investment priority, proving that most felt they already had a well-diversified portfolio.1 Given this, it is important to emphasize that a transition to alternatives is about achieving potentially better diversification.

“Helping retail investors understand the potential benefits of REITs is the first step in closing the knowledge gap that currently exists and democratizing alternative investing for the masses,” said R. Scott Dennis, CEO of Invesco Real Estate. “Through effective communication and education, investors will be made aware of how alternatives such as real estate can potentially broaden exposure to different asset classes within their portfolios and potentially achieve better rate-adjusted returns. risk.”

Not all real estate is viewed the same

The study revealed that not all properties are viewed the same way by investors. The majority of investors felt that now was a good time to invest in technology projects, suburban apartments/housing and warehouses, but were less comfortable investing in retail, commercial premises and offices. In this example, most accredited investors immediately viewed empty office buildings as a risk, not an opportunity.1 Given this, it is important that finance professionals cite specific opportunities in real estate when articulating the potential benefits of investing in the asset class, such as technology projects, medical practices and housing for the elderly.

Other key findings from the Create opportunities the study includes1:

  • Maintain “portion control”. A majority (70%) of accredited investors find it more attractive to have a “portion” of their income requirement allocated to real estate. If the “part” is not explicitly stated, investors may assume that their finance professional is suggesting changing their entire portfolio.
  • Emphasizing the potential benefits of consistent, stable and reliable income resonates with investors. 57% of qualified investors surveyed favor ‘constant’ rental income over ‘sustainable’ and ‘alternative’ rental income as the most valuable potential benefit a real estate investment could offer in the run-up to retirement.
  • Use the language of “more” rather than the language of “less”. 67% of accredited investors preferred the phrase “increase efficiency” rather than “reduce inefficiencies”. Similarly, 61% of investors found there was a greater benefit to investing in real estate assets when they were described as “more stable than stocks” rather than “less volatile than stocks”.

This initiative is part of Invesco Total CX – the total client experience – an all-in-one platform of tools, coaching and content designed to help finance professionals connect with clients, improve their business and optimize portfolios. Creating Opportunity: The Compelling Language of Real Estate Investment Trusts is one of many research studies conducted by Invesco Global Consulting over the past 15 years.

1 Source: Invesco Global Consulting survey of 500 accredited investors (75% with >$1 million in investable assets, 47% with > $10.5mm of investable assets, 52% male, 48% female, 75% with real estate investment experience and 100% of them have used the services of a financial professional.)

About Invesco Ltd.

Invesco Ltd. (NYSE Symbol: IVZ) is an independent global investment management firm dedicated to providing an investment experience that helps people get the most out of life. Our distinct investment teams offer a full range of active, passive and alternative investment capabilities. With offices in more than 20 countries, Invesco has managed US $1.4 trillion of assets on behalf of clients around the world June 30, 2022. For more information, visit

Invesco Distributors, Inc. is the U.S. retail distributor of Invesco Ltd. It is an indirect wholly-owned subsidiary of Invesco Ltd.

Invesco Global Consulting programs are illustrative, informative and educational. We do not guarantee that participation in any programs or use of their content will result in increased business for any finance professional.

It does not constitute a recommendation of any investment strategy or product for any particular investor. Investors should consult a financial professional before making any investment decision.

Alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leverage through derivatives, short selling, and opportunistic strategies that change with market conditions. market. Investors considering alternatives should be aware of their unique characteristics and the additional risks associated with the strategies they use. Like all investments, performance will fluctuate. You can lose money.

Investments in real estate-related instruments may be affected by economic, legal or environmental factors which affect property values, rents or occupancy of real estate. Real estate companies, including REITs or similar structures, are generally small to mid-cap companies, and their shares may be more volatile and less liquid.

Diversification does not guarantee a profit or eliminate the risk of loss.

Invesco does not provide tax advice. Investors should always consult their own legal or tax professionals for information regarding their personal circumstances.

The opinions expressed are those of the author and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.

All data created and produced by Invesco Global Consulting, unless otherwise stated.

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Contact: Jamie Braverman212-278-9630

SOURCE Invesco Ltd.


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