Jargon-laced literature produced by the financial services sector can create a lack of confidence in the industry, according to Ms Inez Bailey, director of the National Adult Literacy Agency (NALA). It can also create a climate that is ripe for the mis-selling of financial services.
Next week is National Adult Literacy Awareness Week, which is targeted this year at tackling "financial jargon".
According to NALA, there are half- a-million adults in Ireland who have an insufficient level of literacy for today's society, and jargon on financial products has the obvious effect of excluding many of them from understanding financial products.
International research and anecdotal information shows there is a large proportion of adults who have a limited understanding of financial matters, according to Ms Bailey.
Research by the Irish Financial Services Regulatory Authority (IFSRA), published in May, found that 75 per cent of consumers consider the written information on financial products too difficult to understand.
Research in the UK has found that a lack of financial literacy can lead to consumers losing money, as they do not have the skills needed for shopping around.
It can also lead to people not making adequate provision for their future financial needs.
The experience of the National Adult Literacy Agency (NALA) is that financial literacy is becoming a major issue, according to Ms Bailey, yet there is no co-ordinated national approach to dealing with the issue. In other countries financial literacy has been high on the socio-political agenda for some years.
NALA is calling for a national education plan to be developed to assist a lifelong learning approach to financial literacy.
Other measures needed, according to Ms Bailey, include: the establishment of a high-level national committee to devise a strategy for life-long learning in financial literacy; an ongoing national media campaign to raise financial literacy awareness; a national, funded strategy for engaging the voluntary sector; and a research programme to monitor the progress of this strategy.
These issues are to be highlighted next week in a series of events, culminating at a conference next Friday in the Institute of Bankers in Dublin. On Monday a new A to Z of Financial Terms, sponsored by the EBS Building Society, is to be published.
Ms Bailey points out that much remains to be done. Last year research was carried out in the UK for insurance company Royal London.
In a concluding remark, the head of communications and research at Royal London, Mr Gareth Evans, said: "The vast majority of the consumers taking part in the focus groups believed that financial services providers are deliberately making their products hard to understand, hiding behind the smoke and mirrors, small print and confusing terminology to avoid payouts."
Meanwhile there are a number of places consumers can turn to for advice.
These include the Irish Financial Services Regulatory Authority (IFSRA), the Money Advice and Budgeting Service (MABS), the Consumers Association and Citizens Information Centres.
