View more on these topics

Does industry jargon deter potential savers?

Industry jargon is putting consumers off investing, new research suggests. 

Axa Wealth recently polled over 2,000 consumers and 500 advisers, asking for their views on industry jargon around investments and the move to clean share classes.

Some 81 per cent of advisers say there is too much jargon in the investment market. Over half of consumers polled, 56 per cent, say they find it hard to understand the jargon used in the investment market without the help of an expert.

On clean share classes, 96 per cent of consumers say they had never heard of the term. 

A third of advisers and 22 per cent of consumers feel that the the concept of share classes is clear to them. 

Almost half of advisers, 46 per cent, say “multiple share classes impede customers”, while 11 per cent disagree.

Around a third of consumers who expressed a view, 31 per cent, believe multiple share classes impede their ability to invest. 

Only 20 per cent of advisers believed that “multiple share classes benefit consumers”.

Thirteen per cent of advisers say clients have been put off investing due to a lack of understanding of clean share classes, while 14 per cent of consumers say they have been put off.

Axa Wealth chief executive Mike Kellard says: “We are very supportive of the principles underpinning clean share classes but problems arise when we move this relatively simple consumer solution into a seemingly impenetrable maze of confusing investment terminologies. As a consequence potential investors may be deterred from investing by a lack of understanding.” 

He adds if the issue of investment jargon is not tackled the result may be a “flight to cash that will simply exacerbate the current savings gap”.

Kellard says: “We need to work hard with advisers to ensure consumers understand this investment message. And understand the greater transparency clean share classes provide. This is part of the great strides advisers have made to make their charges clearer to consumers. This should not be lost in further confusion about charges on investments.”

Recommended

Julie-Patterson-MM-Peach-700.jpg
1

IMA: EU regulations are heading in different directions

Two pieces of European legislation relating to sales practices – specifically “inducements” for financial advisers (or trail commissions) and their disclosure – are heading in different directions. Known as the Markets in Financial Instruments Directive and the Insurance Mediation Directive, they respectively deal with marketing of banking products and funds, and of insurance products. The […]

John-Greenwood-MM-Peach-700x450.jpg

John Greenwood: DWP is wrong to ignore hidden pension costs

There is much to commend in the DWP’s belated focus on charges and commissions in workplace DC pensions. But when it comes to the charges hidden within funds held in pensions, it appears to be ducking the issue altogether. We need a root-and-branch review of hidden annual management charges – as proposed by Labour last […]

Data-Corporate-Finance-Business-Pen-Graph-Growth-700x450.jpg

Ageas Protect reports £2.9m loss

Ageas Protect has reported a £2.9m pre-tax loss for the first nine months of the year, compared to a pre-tax profit of £300,000 for the same period last year. The company says the performance is in line with expectations and reflects the costs of financing the continued growth of the business and a competitive market. It […]

Australia-OZ-Sydney-Opera-House-700x450.jpg

Avelo rebranded to Iress

Avelo has been rebranded as Iress following its acquisition by the Australian technology provider in September.  Iress paid £210m to take control of Avelo from Lloyds Development Capital. The private equity arm of Lloyds Banking Group bought a majority stake in what was then 1st-The Exchange for £115m in 2009. Iress has not yet decided […]

Parental leave and pensions

Fiona Hanrahan  – Senior Product Insight and Technical Support Analyst We are often asked how parental leave impacts workplace pension schemes in terms of funding in general, auto enrolment and salary exchange. This article will explain each of these. How does parental leave impact the funding of workplace pension schemes? A member of a defined […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. If advisers cannot understand it, they should most definitely be selling it !

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com