Client communications

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When engaged in the tiresome business of one-way client communications, bear a few things in mind.

Client communications are some kind of damage limitation exercise

Even if they are not, specifically, a damage-limitation exercise, if you are writing to all of your clients at once, the news is either outright bad — you’ve screwed something up — or just tedious — regulations have changed and there is some stuff you need to know.

In most cases, if your clients care at all about your letter, they will care a lot less about it than you do. No one sends out client comms for the hell of it: usually they will be instigated by your regulator or your compliance department, and in neither case will your client be very interested in them. Perhaps they should be, but they won’t be.

Since your tidings will be somewhere between irrelevant and annoying, assume your readers, being human, will react by ignoring it, being confused by it, being irritated by it, or being confused and irritated by it, and therefore ignoring it.

Since you don’t want them to be confused or irritated or to ignore the letter take care about how you phrase it.

Be brief

Your subject matter experts will understand all the details, and will barely be able to resist regurgitating them all over your letter. Don’t. Say what you need to say, as clearly as you can so that a non-specialist will grasp is straight away, and no more.

Don’t say Do say
The Upper House of the German Parliament on 28 May 2021 approved the bill pertaining to the modernisation of withholding tax relief procedures (“AbzStEntModG”; Abzugsteuerentlastungsmodernisierungsgesetz), parts of which are due to enter into force on 1 July 2021, especially amendments to the German Investment Tax Act. The bill foresees a change in terms of the relief at source procedure applicable to income payments subject to German withholding tax (for example dividend and taxable interest payments) paid to a foreign investment fund (“beschränkt körperschaftsteuerpflichtiger Investmentfonds”). In this context, newly issued fund status certificates will contain information on the corporation tax status (“Körperschaftsteuerstatus”) of the certified investment fund. Current valid certificates that are already submitted, however, will stay valid according to a letter issued by the Ministry of Finance on 1 June 2021 (BMF – reference GZ: IV C 1 - S 1980-1/19/10027 :006 DOK: 2021/0577184). On 1 July, Germany changed its rules for claiming withholding tax relief on dividend income. These changes affect non-resident investment funds.

Get to the point

Presume that if a client starts reading at all, it will stop reading far more quickly than you would. If you expect your client to do something, state it clearly, plainly and above all early in the communication.

Don’t say Do say

The original fund status certificate needs to be in place at the Bank before the taxable income event is due to be paid. To avoid delay of certificate recording, customers are reminded to send the fund status certificates to the Bank.

From 1 July, you must provide us with newly issued WHT certificates before the dividend record date.

State consequences

Be clear what will happen if the client doesn’t reply. Don’t be judgmental; just matter of fact.

Don’t say Do say
In accordance with the above-mentioned bill, any application for the reversal of overpaid tax, via presentation of a fund status certificate with retroactive validity, will no longer be possible via the Bank. Instead, the reclaim must be addressed directly to the Federal Central Tax Office (Bundeszentralamt für Steuern; BZSt). Consequently, as of 1 July 2021 customers providing a fund status certificate for a foreign investment fund after the payment date of the taxable income event cannot be refunded. Full tax must be withheld. The Bank will in turn issue a tax voucher upon customer request. If you do not, you must file your WHT reclaim directly with the German tax authority.

Be persuasive

Frame your letter to appeal to your correspondents, so they are more likely to read it.

Personalise it. don’t say “Dear Client” — don’t ever do that — but address it to an individual by name, and send it from an individual, by name. Yes, I know it is a mass mailshot to every client in the book. But we are in 2021, friends. It is not beyond the wit of technology, anymore to use a freaking mail merge. (you thought I was going to say “use neural networks to guess client names” didn’t you?). What’s stopping you? Oh, crappy client static data? Fix your damn client static data. If your salesguys aren’t keeping it up to date, they’re not doing their jobs. Either have good client static data, and use it to demonstrate you care enough about your client to be justified in calling them “dear” — or don’t, accept your clients to you are a passive herd of cattle there only to be milked, and don’t try to be ingratiating while you do it.

Don’t say “please be advised”. Just don’t do it. These are your valuable clients, not truculent secondary school children plotting to burn down the staff room.

Go easy on the disclaimers. Think first “what will my client think of me if I say that”, rather than “what if I get it wrong and my client sues me?” As the JC’s pithy maxim has it: usually, you only need airbags if you don’t steer straight. Concentrate on defensive driving, not crash mats. If you have to have a disclaimer — and I know, you will have to have one — keep it brief, to the point and put it at the end. If the first thing your client reads is “Please be advised we take no responsibility for this, we are only doing this because someone said we have to, so on your own head be it”, your client is going to think, “gee, what a douche”. Generally, that’s not how you want your client to be thinking now, is it?