Understanding and dropping industry jargon in enrollment and education meetings might make advisors feel smart, but it also might make participants less willing to plan and save, and therefore result in fewer assets for retirement.
Empower Retirement is the latest organization to slam jargon’s use, releasing a white paper titled Less jargon, more clarity savings that details its unintended consequences.
“Think back to the last time you watched a court proceeding on TV or went to the doctor’s office,” the authors write. “You probably heard some words whose definitions you didn’t know with certainty or maybe at all. Those words may have sounded highly technical—something you’d refer to as jargon. Insiders may value these terms for their accuracy and brevity, as well as the expertise they convey. But for the average person, technical language can be confusing or off-putting.”
It references a team of researchers from Ohio State University who studied the effect of jargon in scientific papers. More technical language made it harder for people to understand the content, they found, adding that encountering jargon made readers feel less capable and less interested in trying to engage with the topic.
Specific to retirement planning and how advisors communicate, it could result in savers being less willing to engage in planning or take action to achieve their financial goals, Empower argues.
It then listed examples of plan terms that have different meanings in everyday use:
Contribution
Gift or donation to charity
Match
An athletic competition or dating service; something to light a fire with
Deferral
The act of putting something off until later
Allocation
The amount expected of an item in short supply
Election
The process of choosing political candidates
Distribution
How companies get goods to consumers
Rollover
A trick one teaches their dog
Vehicle
A car or truck
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
