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October 19, 2013

Are pie charts a good reason to fire your stock broker?

I suppose my broker doesn't really have any say as to what Raymond James sends out to his clients, but this puts me on the verge of revolving. Is that bad? He is a great guy, but one has to take a stand, right?

The pie chart is bad enough, but then they:
  1. Added crazy marks to some of the slices (I guess that's because it's in B&W)
  2. Labeled the slices to two decimals (way too precise for me)
  3. Didn't sort the slices in descending order

A simple bar chart would be just fine thank you. 


  1. This chart certainly leaves room for improvement, here are two more points:
    4. two extra items in legend
    5. to read it, we have to switch between the legend and the chart, the text is not close to the slices

    As for why they did what they did, there may be a logical order to the arrangement of the slices, it may be sorted by risk, or like placing an 'Other' as the last item. This may be a situation where a pie chart can be more effective to a bar, when you want to combine multiple items. For example, easily seeing that Equities is more than 50%

    Of course, if the goal is to see what segments are the largest to smallest, or compare the sizes of individual items, then the bar chart you have is great, but biggest to smallest or individual items are not always the complete story, sometimes there are other things can be important too, like risk or groupings. Maybe other approaches could communicate these things better than a pie chart.

  2. Another issue that is not visible, is the classification of what is considered in each slice. Are they using fund level descriptions or individual level descriptions? For example, a mutual fund may be classified as US Equity, but hold 15% in non-US Equities. Some reporting tools will call that 100% US Equity (based on the classification), others will report that correctly as 85 US / 15 non-US by looking into the holdings in the fund. In either case, without knowing, the pie chart is not only ugly it's meaningless. And yes, I do this for a living (the investment part). GIGO.

  3. For most of people presenting data is creating pie charts in Excel. You will find many weird pie charts on websites of statistics offices, international companies.

    Think about job interviews, there are many questions about data analyse, programming languages, but they never check if you are able to select proper chart to data and so on.

    People don't want to learn how to present data in better way as most of senior managers enjoy their pie charts :)