And among the results are widespread incomprehension, deep-seated distrust. Some wealth managers say their clients frequently don't follow their
recommendations -- and some firms put a lot of energy into devising ways to
guide their clients safely through to the "implementation" stage.

But if a new study by AARP
Financial sheds any light on the
subject, the problem may be less a matter of indolence and more the result of
chronic incomprehension.

Head
scratchers

It seems that most Americans can't make head or tails of what "Wall Street"
is trying to tell them, and many of them are making costly investment
errors as a direct result, according to the AARP study.

"Investing has become unnecessarily complex, confusing and, in some cases,
intimidating," says AARP Financial's CIO Mac Hisey. "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."

Half of the 12,000 adults surveyed few months ago by phone described
themselves as "not so" or "not at all" knowledgeable about investing. In fact
the survey suggest that Americans feel more confident in their ability to choose
a medical professional to perform major surgery than to choose a suitable
investment.

The typical client doesn't even get high-profile buzz words like "basis
point," "expense ratio," and "index fund" -- phrases that less than a third
of those surveyed said they understood well enough to explain to a friend or
co-worker.

Suspicious
minds

More than half of
those surveyed said they don't read financial literature because "it's too hard
to understand," and even more say that car insurance policies and
prescription-drug inserts are far easier to follow than mutual-fund
prospectuses.

"Many people are more likely to read the nutritional information on a cereal
box than read a mutual fund prospectus before they buy," says Hisey.

But it gets worse. The survey suggests that a lot of people out there see the
financial-service industry's penchant "inside basball" not just as a reflection
of inherent complexity or strict regulation, but as a cover for systemic
chicanery.

78% said they believe that materials from financial companies are more about
selling than educating
63% say that a major reason jargon is used is to make a product or service
seem more impressive
54% believe that jargon is used instead of simpler terms is to distract
people from focusing on the fees they will be paying
49% believe a major reason jargon is used is to make the consumer feel less
confident that they can handle their own finances

"No one is well-served by this confusion: not the industry, not consumers and
certainly not our relationship with the investing public," says Hiesy. "We talk
a lot about transparency in this industry but not enough about simplification
and understanding." -FWR

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