Balderdash, bunkum, mumbo jumbo. It is all around us. We live in a world full of jargon and nonsense and financial services is no exception.
A mountain of research shows that financial jargon stops private investors from putting their money into shares.
It is also a major hurdle to be overcome in the world of packaged products such as unit trusts and Isas.
Over half of potential investors are baffled by the complex terminology used by the financial services industry. The headlines make grim reading.
Two-thirds do not know what the FTSE 100 is.
76 per cent do not know what an Isa Cat standard is.
62 per cent of people do not know what a unit trust is.
Four-fifths of people could not describe a retirement annuity.
Perhaps more worrying is the study which suggests that more than 500,000 people in the UK have annuities but only 17 per cent of them are aware that when they die the investment goes to their insurance company and not to their heirs.
Advisers believe that they are careful about explaining technical terms and that the main reason for lack of interest in certain financial investments is because investors are put off by the risks involved. “This is one of the most important roles of any financial adviser,” says Richard Hunter of IFA Holden-Meehan.
“Somehow we have to take in extremely complex information and express it to those not necessarily financially inclined in a precise, yet digestible manner.”
IFA Promotion's David Elms says IFAP tries to avoid jargon in its literature and its dealings with all audiences, whether IFAs, product providers, sponsors or consumers.
He says: “It is hard to reach the very high standards for plain English accreditation every time but we make everything as user-friendly as possible.”
A recent Plain English Campaign survey on pension information revealed that nearly half of the 18 million people contributing to a pension scheme thought the language used was confusing.
I asked Interactive Investor users to tell us whether they believe there is an industry conspiracy to sell unsuitable products or that financial matters are so complex they are impossible to explain in simple terms.
Three out of four said financial advertisements and information might as well be in Swahili and the industry should remedy this.
Less than a quarter of users said they did not care what the small print said so long as the returns were realised. More money than sense if you ask me.
Only 4 per cent said they had faith in the industry and that professionals should not be made to dumb down. A staggering 92 per cent felt “caught out” by small print or knew someone – usually a family member – who had been.
Merrill Lynch Mercury Asset Management co-head Carol Galley, one of the most powerful women in the City, is a champion of the plain language cause.
She blames excessively complex terminology for keeping people in the dark when it comes to money. “The language of finance has been used, consciously or unconsciously, by those in the know to exclude those not in the know.
“You should challenge conventional wisdom and question everything you see and hear. Common sense can go a long way too,” she says.
The FSA is also on the warpath with plans to change the rules which financial institutions must follow when preparing consumer information and documents. Head of consumer policy Victoria Raffe says: “It is in everyone's interests that consumers are given information in a way which encourages them to understand the commitment that they are making before they sign on the dotted line.”
It is true that the FSA has put a lot of effort into improving its literature but I did mange to unearth the following gem in consultation paper 73, Investigation of complaints against the FSA: “FSMA requires the Complaints Scheme to confer on the Commissioner the power to recommend, if he thinks it appropriate, that the FSA remedies the matters complained of.”
As Elms says: “No one can afford to relax. There is always room for improvement.”
A survey by temp agency Office Angels revealed 65 per cent of us regularly encounter business jargon such as “blue sky ideas” and “a helicopter view”.
Although a third of us are irritated by this, one in five feels obliged to repeat the phrases when we do not know what they mean, thus perpetuating the problem.
The people behind the survey believe jargon and in-phrases can bring teams together in an almost tribal way but are more frequently used to exclude and confuse others or to mask inexperience and lack of expertise.
A poll of Britain's top writers and broadcasters voted Deputy Prime Minister John Prescott the public figure with the poorest command of the English language. This was prompted by comments like “The sceptre of unemployment in the North-east.”
The Department of Trade and Industry also gets a wooden spoon for using the tortuous phrase “a wheeled vehicle designed for the transport in a seated or recumbent position of one or two babies or infants” to describe a pram.
The medical and legal professions come in for criticism too. Hardly surprising when lawyers still use the phrase “res ipsa loquitur” when they want to describe something as “self-evident”. Ironic eh?
With the dictionary now including new favourites such as “Disneyfication”, “docusoap” and “off message”, what hope is there for the tangled arena of financial services, where many of the boundaries are set by legal and regulatory requirements?
In the absence of a best seller entitled Janet and John Shop Around for an Open Market Option, the answer is to change your paradigm, get your ducks in a row and do some joined-up thinking about the benefits of clearer language to your customers and your business.