Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
AARP study gives poor grades to FIs communication
TEWKSBURY, Mass. (6/12/08)--Credit unions may want to note a recent nationwide survey that indicates that the financial services industry isn’t effectively communicating with consumers. AARP Financial, a subsidiary of the American Association of Retired Persons (AARP), found that more than half of adults surveyed said they have made an investment with an unfavorable outcome because they felt confused or didn’t understand an investment. “The relatively straightforward process of saving for the future has become incredibly complicated,” said Richard Hisey, AARP Financial chief investment officer. “As a result, many American investors have saved too little--most with less than $50,000 for retirement--or are too intimidated to get started in the first place,” he said. About 54% said they do not read financial literature because it’s too hard to understand, and 41% said information from financial services companies is not helpful. Two-thirds of survey respondents graded the financial services industry with a “C,” “D,” or “F.” More than 70% said financial professionals use more jargon than their car mechanic, and more than 50% said they use more jargon than doctors. “We’ve made it incredibly easy for Americans to spend and create debt, but unnecessarily difficult to invest comfortably and with confidence,” Hisey added. Respondents said they feel the jargon is intentional. What’s more:
* 54% believe jargon is used to distract people from focusing on the fees they will pay; * 78% said they believe materials from financial companies are more about selling than educating; * 63% said jargon is used to make a product seem more impressive; and * 49% believe jargon is used to make consumers feel less confident that they can handle their own finances.
“No one is well-served by this confusion,” Hisey said. “We talk a lot about transparency in this industry but not enough about simplification and understanding. What value does disclosure bring if the average investor can’t comprehend it?” The survey of 1,203 adults, age 18 or older, was conducted by telephone from Jan. 23 to Feb. 10.
Other Resources

RSS print
News Now LiveWire
Members of Interstate FCU have voted to merge with Credit Union of Southern California https://t.co/yYeSWEG4GH
2 hours ago
.@InfinityFCU has named Liz Hayes as president/CEO. Hayes was formerly EVP and chief administrative offficer at @Affinity_Plus
2 hours ago
.@wpcu battles Speedway in round 3 of Dayton Brand Madness via @DBJnews http://t.co/EbQL5f9be8
3 hours ago
New at #NewsNow: Fed regulators approve new #QRM rule. http://t.co/Bdz5q43xjZ
4 hours ago
#NewsNow New league award honors Commitment to Cooperation http://t.co/OPt97flShn
5 hours ago