Financial services marketers could learn a lot from the Marx Brothers. In one scene from A Night at the Opera Groucho tries to get Chico to sign a contract written in high legalese. He objects to every clause, tearing each one up until the only thing Groucho has left is the Sanity Clause. “Don’t-a be stupid,” says Chico. “Everybody knows there ain’t-a no Sanity Claus.”
Chico Marx would have had a field day with the vast majority of the financial services direct mail that ends up on people’s doormats. All too often written in the same sort of impenetrable jargon as Groucho’s contract, many consumers would undoubtedly love to tear them up. People are too embarrassed to admit that they don’t understand what benefits they are supposed to be getting from their pensions or investments.
As a result, some don’t take them out at all, while others are potentially not maximising their future returns.
Help is at hand, however: a number of financial services companies have realised that consumers need plain English, and, with the help of their direct marketing agencies, have rewritten the rules on what words should be used in leaflets, mailing packs and fulfilment documents.
Gordon Maw, marketing manager of Virgin Direct, says that Virgin’s financial services products were launched with a simple message – no jargon, no pitch, no commission. Virgin “tries to stay away from ‘industry’ words. The financial services market is riddled with abbreviations and completely wrapped up in jargon – but the people we talk to, the consumers, aren’t in the industry. How are they supposed to understand its language?”
Graham Leigh, marketing director of new financial services company b2, agrees that there is a problem with jargon – but he thinks that simply translating jargon into plain English may not be enough.
“Plain, clear English can be as complicated as jargon, if it’s written badly. You have to be able to write direct mail, inserts, whatever, in a way that does not mislead the consumer.”
b2, backed by Barclays, offers consumers easy-to-use, simple and fairly priced tax-free savings plans, Leigh says. There are no hidden charges, and everybody involved in the marketing has been trained to steer clear of jargon (b2 is a member of the English Language Commission, an independent body which advises organisations on how to get rid of jargon).
Leigh adds that recent research conducted on behalf of b2 shows that 71 per cent say they find it difficult to invest on the stock market because “I don’t know enough”, while 68 per cent “don’t really understand the financial jargon used by companies”.
He also points out that old-style financial services providers are facing a challenge from the grocery multiples and from companies such as Virgin, which have “built themselves on the ability to communicate their product offer clearly to consumers”.
Unfortunately for the big banks, building societies and insurance companies, Leigh suggests, there are “still a lot of marketing people in those companies who have come from the ‘product manufacturing’ end of financial services”. As a result, they focus too much on the technical detail of their offer, rather than on communicating the benefits their products may provide.
“People don’t understand this stuff – you only have to go to half a dozen focus groups to have that hit you between the eyes.”
He adds: “It’s similar to buying a car. You don’t need to know all the details of how the engine was put together – you want to know that it’s safe, and how long it takes to do nought to 60.”
But many financial services marketers are still using jargon because they are afraid of falling foul of the industry regulators. They become so fixated on producing marketing material that is legally faultless, that they forget that most consumers aren’t lawyers.
Often, though, if they actually spoke to their compliance departments about rewriting their advertising and marketing copy so that it made sense to consumers, they would find that their fears are groundless, says Graham Mills of direct marketing consultancy OgilvyOne.
Mills, who himself was a marketer in the financial services industry, believes that most financial services direct marketing has successfully moved away from jargon. But he admits that while “some get it very right, some do get it very wrong”.
One problem, he says, is that “some marketers view their legal departments as if they were another level of Dante’s Inferno, but I’ve always found lawyers to be perfectly reasonable people”.
This exaggerated fear of what the compliance officers might say means that often financial services marketers will resolutely stick to their jargon, no matter how hard their agencies might try to convince them to use plain English.
Ruth Miller, director of simplified communication at marketing consultancy Siegel & Gale, remembers that “one client told us we couldn’t use the word ‘pension’ – they said we had to use ‘retirement benefits’, because the customer might opt for a lump sum at the end of the period.”
Another client was intransigent over the term “draw-down”, which technically refers to the actual paying over of the mortgage to a house buyer’s solicitor when all the paperwork to buy a property has been completed. Siegel & Gale argued that consumers just wouldn’t understand the term – but, Miller says, “we tried to get them to use any word other than ‘draw-down’ – but they wouldn’t”.
Miller has a long list of words which financial services companies love to use but which she argues could be put into plainer English – including such banking favourites as bid and offer prices (“why can’t you say ‘buying and selling’ price?”) and deposits and receipts (“paying in and taking out”).
But there is considerable inertia in the financial services industry behind its jargon, she believes. And then there is the idea that saying something in plain English makes it less authoritative. “I don’t think it’s a deliberate conspiracy” to force the public to rely on financial experts, she says.
On the other hand, while not a conscious conspiracy, the use of jargon may be an unconscious way for those in the financial services industry to demonstrate their superior knowledge.
Unfortunately, a club which keeps itself exclusive by using a language that ordinary people can’t understand is hardly likely to be able to market its products successfully to those ordinary people.
The US stock market investment regulator, the Securities & Exchange Commission, has already started to review the language the industry uses (with advice from Siegel & Gale), and Miller argues that a similar move is overdue in the UK.
“The whole problem needs to be sorted out with the regulators, the financial services companies and their marketing services advisors,” she says. But b2’s Leigh observes that “it takes a big effort to abandon the jargon and actively write to people in a way that they understand”.
Steve Ellis, a director at specialist financial services direct marketing agency MBO, believes that part of the problem comes when agencies take on their first financial services client.
“In that situation, copywriters tend to feel more comfortable quoting chapter and verse. But it’s much better if you can encourage clients to use plain English. The bigger clients tend to understand better and have enough confidence to get rid of jargon.”
Ellis – a former direct marketing manager at the Woolwich and head of marketing at Saga Services, the financial services arm of the Saga Group – adds that “fulfilment material tends to be the worst. Off-the-page lead generation ads tend to be relatively clear”.
But some jargon may be on the way out anyway: with recent scandals over poor investment advice to consumers still hanging over the market, certain phrases may have picked up negative connotations.
David Bird, business development and marketing manager at brokers RK Harrison Financial Services, suggests that “you should be careful when you mention the words ‘personal pensions’, because of the association in clients’ minds with the pensions mis-selling fiasco.”
There is an argument, however, that jargon is a useful tool in financial services.
Stacey Paige, account director at direct marketing agency Craik Jones, heads the team working on execution-only discount broker Charles Schwab (translation: a stock broker which does not offer clients advice on what investments to make – it just carries out their instructions to buy and sell, and handles the house-keeping for their portfolios).
She argues that for Charles Schwab, a certain level of jargon helps to sort out the clients it wants to target – those who already have substantial knowledge about investing in financial products.
While all Charles Schwab direct marketing uses clear and friendly words, she says: “We are targeting the very sophisticated investor, and we use quite specific language in our communications.
“We deliberately use terminology that the general public might not understand – in a sense, we’re using jargon as a kind of filter. It’s a very useful way to get people to self-select.”