Web-based research and commerce have granted unprecedented levels of choice to consumers seeking products and services.
It has also fostered a “do-it-yourself” attitude that — especially for financial- and health-related research — can overestimate the sophistication level of the general public.
How wide is this knowledge gap? Greater than many professionals in a consulting role might guess.
In the first-ever National Assessment of Adult Literacy (NAAL), a study of more than 19,000 individuals, the Department of Health and Human Services found that just 12 percent of U.S. adults could be considered “health literate.” The study found that otherwise-savvy college graduates may misunderstand medical terms, be unable to calculate risk levels, pursue or forego a treatment or be overwhelmed by the complexity of learning about and managing an illness.
Financial literacy, especially when it comes to health insurance, is also a challenge. According to an August 2013 survey commissioned by the American Institute of CPAs, when asked to explain basic insurance terms like “premium,” “deductible” and “copay,” fewer than half of respondents could define at least one of the words.
How can financial planners help their clients make better informed decisions? Start by taking a cue from the federal government and use “plain language.”
The Plain Writing Act of 2010 requires that public information in print materials and on websites — such as the comprehensive sites for Medicare (medicare.gov) and the Health Insurance Marketplace (healthcare.gov) — use “clear government communication that the public can understand and use.”
It takes commitment to move from traditional communication to plain language, especially in the jargon-rich financial services industry, according to Lauren Fleshler, owner of New York City-based Easily Said and Done Consulting.