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Ending the scourge of jargon: time for financial firms to talk straight
Financial companies blanket themselves in complicated language. It’s time for that to end, says Mouthy Money editor Edmund Greaves.
When was the last time you read the terms and conditions jargon for a financial product you bought, or signed up for?
I’ll be honest for my part – it was probably when my wife and I got the mortgage to our first home. I did it because it felt like a big deal. A huge long-term commitment.
But for the rest of it? Nah. F**k it. I’m sure it says what it should say etc. The regulator or Ombudsman have got my back. Right?
The answer to that is, well, possibly. But we still assume a significant amount of risk on our own finances by signing up to products we potentially don’t know the full function of.
Were something to happen, and you take your case to an adjudicator, then not having read the Ts&Cs is no defence.
But the problem here is that many financial firms make their documents so difficult to read and digest that we simply switch off from them. So who’s to blame?
It would be easy to blame financial companies for deliberately obfuscating but it is potentially a bit more nuanced than that.
This was the nub of the discussion I had with my excellent guests on this week’s Mouthy Money podcast.
I was joined by James Daley, founder of ratings and consumer group Fairer Finance, and Robert Vaudry, chief customer and investment officer at Wealthtime, to take a deep dive into the world of financial jargon, retirement language and regulatory change coming for financial firms who don’t explain their products in simpler terms.
Financial firms exist under very specific regulations laid down by the FCA and the Government. Often in order to comply with such rules, firms bend over backwards to get their information right. This, unfortunately, means getting the lawyers in to aim for precision and legal compliance.
This comes at the cost of easy understanding, typically.
Winds of change
The winds of change are however blowing for the rule of financial jargon in Britain. The new Labour Government has made noises about simplifying much of the process around communicating information.
This comes on the back of Consumer Duty – a wide-ranging new set of rules designed to make financial firms consider their customers before anything else.
The hope then is that companies will dispense with the ludicrous verbosity of their Ts&Cs and focus on delivering the important facts in the simplest way possible to the people who need to understand it the most.
You can listen to the full episode with James and Robert on all our podcasting channels (Apple Podcast and Spotify) or watch the full thing on our YouTube channel.
Photo by Pixabay
