Read any good cereal packets lately? How about the ingredients label on your shampoo bottle? Both are likely to provide a more interesting read than the latest missive from your bank or pension provider, according to a new survey.
Despite a swathe of financial survey industry initiatives to improve the clarity of communication with customers, many people still find their financial correspondence is a turn-off, finds the survey by Docucorp, a company that manages business information, found.
Sixty per cent of those surveyed said they did not regularly read the financial correspondence they received, with women and young people the most likely to switch off. Three-quarters of adults surveyed said they would rather read the calorie information list on a food packet or their horoscope than a statement from their mortgage company, insurer or pension provider.
“This is not a simple case of consumer indifference,” says Tracey Robinson, vice-president at Docucorp. “The lack of attention paid to pensions, for example, can be explained by the fact that consumers rank their pensions’ information as the most poorly presented and difficult to understand out of all their financial correspondence.”
With separate research indicating that consumers have a poor understanding of how everyday financial products work, these results are worrying. Consumers buy products they may not need or neglect others they do; the financial services industry fails to make sales; and government policies aimed at goals such as increasing saving for old age are thwarted.
“The financial capability of most consumers is low,” commentssays Martin Shaw, a director of the Raising Standards initiative launched five years ago by the Association of British Insurers.
“Raising Standards was a response to government initiatives to improve the savings rate. One way to do that is to make consumers more confident about our industry and how our products meet their needs. We recognised that clear language was a cornerstone.”
Information provided to customers in what is known as the “key features document”, was simplified and made consistent across a range of products so that consumers could compare them. “We removed industry jargon and wrote in clear English,” says Shaw.
The Raising Standards initiative has signed up companies including Friends Provident, Prudential and Standard Life to its cause. Fifty- eight per cent of the life and pensions industry hassuccessfully met the initiative’s eight standards, including clear explanations ofhow chargesare calculated, Shaw says.
These initiatives are welcomed by the Plain English Campaign, which has been battling for the past 25 years to improve the quality of communication generally. “Progress has been made but there is still a long way to go,” says Ben Beer, spokesman for the campaign, which helps train people to write more clearly and runs an award scheme highlighting best and worst practice. “You can always use simpler words.”
The Plain English Campaign says that the legal profession and the finance industries are the cause ofthe most concern. “Plain English is about language affecting ordinary peoples’ lives. People have the right and the need to make informed decisions about money and the law.”
The campaign has awarded Crystal Marks to banks, building societies and insurers that have passed its plain language test for their documents. A Silver award signifies 25 documents have made the grade; a platinum award is for 100 documents.
But a Golden Bull goes to companies that transgress. The only financial services group to win one of these last year was Bank of Scotland. This was for a letter giving notice that the bank had “retrocessed, reponed and restored executors and assignees, in and to their own right and place in the undernoted policy of assurance by our office...”
The bank says it has since become a corporate member of the Plain English Campaign, which means all its documents are subject to scrutiny, but the path to communications clarity is clearly a bumpy one.
The Financial Services Authority, which won a Golden Bull in 2001, has also joined the war on wordiness. called iIn May it called on mortgage companies to improve the quality of their key facts documents and on all firms to review their paperwork. , which are intended to explain the most important aspects of a mortgage in a very few words.
The FSA, itself the winner ofwhich won a Golden Bull in 2001, said it had “identified variable quality and widespread inaccuracies” in many of the documents and it called on firms to undertake a review of their paperwork. Clive Briault, the FSA’s managing director of retail markets, said: “We also found cases where documents were not in line with the format and content required by our rules, were too long or were written in overly legalistic language.”It acknowledged that firms had made efforts.
