Plain and easy for investors

Isaac Moledi

Isaac Moledi

How many of us understand the role that "plain English" plays in making investing simple? And how much do we understand about what we usually buy or invest in?

The new Consumer Protection Bill requires that a person with minimal experience as a consumer of relevant goods and services should be able to read and understand a company document's contents and services.

The requirements of the (Fais) Financial Advisory and Intermediary Services Act support this by aiming to ensure that investors understand what they buy and that there is a record of this understanding.

Plain English, says Shannon Edwards, marketing manager at Allan Gray, is about transparency, simplicity and acting in investors' best interests.

Edwards believes that investing is complicated enough without the jargon that accompanies it. She says her company has undertaken an extensive revision of its documentation and re-written it in "plain English" to make it more accessible to investors.

"Even for those of us in the industry, the complexity of the information can be daunting."

She says plain language promotes investor confidence by reducing confusion and building trust.

"The easiest way to lose an investor's trust is to create false expectations through complicated communication," she says.

As proven by the financial crisis last year, Edwards says many investors are not equipped with the information or expertise to deal with or question assumptions inherent in complicated products and in the scenario planning on which many products are based.

"Plain language begins to address the imbalance of power between consumers and financial institutions. We need to work harder to make services accessible and transparent and to play our role in educating and informing investors so that we can establish and maintain trust and credibility."