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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.”



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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 !

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