Adviser language not connecting with clients
Financial advisers need to acknowledge that they are not communicating with their clients in a simple way that makes it easy for them to think about their financial situation, a financial adviser believes.
Caboodle Financial Services managing director, Peita Diamantidis, said advisers needed to be more than just technical experts to boost financial literacy, and cited the overt use of acronyms as an example to demonstrate advisers were not connecting with clients.
"NASA scientists don't use as many acronyms as our industry does. That sounds like a lie [but] it's true," she said.
"So people who deal with quantum physics don't use as many acronyms as we do. It's insane."
Diamantidis said clients only understood one out of 20 words in financial advice documents like product disclosure statements, statements of advice and even brochures advisers may compile for clients.
"The flyers we put together, maybe it's on a topic we want to educate: get a member of your team or their friend or their daughter to read it, and ask them to underline which words they understand and you're going to be a little horrified," she said.
She advised that the only way to change behaviour in the way clients managed money was through self-discovery, and added advisers should stop lecturing clients using jargon.
Using terms like super consolidation immediately disconnects the clients from the advisers.
"For lots of people, it doesn't resonate. What we need to say is ‘do you even know where your money is'? You need them to go ‘oh, no I don't'. And then they'll start to discover," Diamantidis said.
"Think about when we tell versus when we let them discover. I think that's probably one of the key challenges: we're just telling them what to do."
AUTHOR
Malavika Santhebennur
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