With the economy struggling, consumers scarcely need an extra reason to look askance at the financial-services industry. But they get one in the form of not-very-comprehensible communication from that sector, according to polling conducted for AARP Financial Inc. by GfK Roper Public Affairs & Media.
When asked to assign a letter grade to the job financial-services companies do of “explaining saving and investing to consumers,” 67 percent handed out a C, D or F. What’s worse, many respondents think the language the business uses is deliberately opaque. Fifty-four percent believe impenetrable jargon is used “to distract people from focusing on the fees they will be paying”; 49 percent think difficult language is employed to make consumers “less confident that they can handle their own finances.”
As if all that weren’t bad enough, 52 percent feel they’ve had an “unfavorable outcome” with an investment (for instance, due to owing unexpected taxes) because they didn’t adequately understand it. In other instances, lack of clarity dissuades them from acting: One-sixth of the respondents said they’ve “failed to sign up for a retirement plan at their job because they didn’t understand how it worked.”