Consumers Seek Clarity In Financial Affairs
According to the branding firm's "Simplicity Survey" of 1,214 homeowners and investors between Dec. 29 and Jan. 5, 79% deem it "very important" for President-elect Obama to "mandate that clarity, transparency and plain English be a requirement of every new law, regulation and policy." And 75% said that complexity from financial companies and the resulting lack of understanding played a significant role in causing the current financial crisis.
Yet, when asked "which national figure they trust most to explain, interpret and show leadership through the current financial crisis," President-elect Obama was named by just 15% of respondents (although another 5% named a generic "president"). He led the list, however, with another 15% saying they didn't know, 33% saying "no one," and the remaining 33% divided up among a bevy of names ranging from Bill Clinton and John McCain to Rush Limbaugh and Suze Orman.
And who or what do people trust for advice and information on financial matters? Financial advisors were cited most often (29%), followed by family members (28%), accountants 8%), Web sites (7%), friends (6%), lawyers (4%), stockbrokers (3%) and bringing up the rear, the traditional media--newspapers (2%) and media personalities, TV programs and magazines, at 1% apiece.
They certainly don't seem to trust financial institutions themselves, as 63% agreed that "banks, mortgage lenders and Wall Street intentionally make things complicated to hide risks or keep people in the dark." Yet 84% said they would be more likely to trust companies that use jargon-free, plain English in their communications.
On the other hand, 52% of consumers admitted that they only "sometimes" or "never" read investment materials or insurance policies that they sign, with 50% acknowledging that "it's the final responsibility of the customer to make sure they understand all the risks."
Mortgage applications (48%) were found to be the most "difficult to understand," followed by health insurance "explanation of benefits" forms, tax returns and investment account statements.
Compared to a year earlier, 37% of consumers said they were less likely to trust their mortgage lender, 36% their broker or financial advisor, and 35% their bank.
If communications were jargon-free and in plain English, however, the survey found that consumer interest in investing in financial products would increase 79%; selecting brokers or financial advisors 73%; purchasing life insurance 67%; and taking out loans and applying for credit cards, 63% each.
"Transparency and authenticity are the new marketing imperatives," Lee Rafkin, Siegel+Gale's global director of simplification, said in a statement. "People are fed up and desperate for institutions and brands that offer simple and honest communications."