New Zealand markets closed
  • NZX 50

    11,730.52
    -29.49 (-0.25%)
     
  • NZD/USD

    0.6457
    +0.0026 (+0.41%)
     
  • NZD/EUR

    0.6286
    +0.0060 (+0.97%)
     
  • ALL ORDS

    7,288.80
    -36.60 (-0.50%)
     
  • ASX 200

    7,032.50
    -38.50 (-0.54%)
     
  • OIL

    91.88
    -2.46 (-2.61%)
     
  • GOLD

    1,818.90
    +11.70 (+0.65%)
     
  • NASDAQ

    13,565.87
    +273.89 (+2.06%)
     
  • FTSE

    7,500.89
    +34.98 (+0.47%)
     
  • Dow Jones

    33,761.05
    +424.38 (+1.27%)
     
  • DAX

    13,795.85
    +101.34 (+0.74%)
     
  • Hang Seng

    20,175.62
    +93.19 (+0.46%)
     
  • NIKKEI 225

    28,546.98
    +727.65 (+2.62%)
     
  • NZD/JPY

    86.1590
    +0.6720 (+0.79%)
     

IPO, ETF…sorry, what? Almost 50% of Aussies don’t understand financial jargon

·2-min read
Man standing in front of ASX
Most people think better financial education in schools would be the best solution to poor financial literacy. (Source: Getty)

The long list of abbreviations and jargon used by financial institutions has almost 46 per cent of Australians flummoxed.

A nationally representative survey by YouGov, commissioned by Cannings Strategic Communications, found 46 per cent of Australians struggled to understand financial information.

Only 13 per cent of people surveyed considered themselves fluent in financial speak, according to the survey.

People living in regional areas on low incomes - below $50,000 - were also more likely to rate their financial knowledge as poor (22 per cent) compared to people living in metropolitan areas and earning more money (15 per cent).

Women were also more likely to rate their financial knowledge as poor, with 25 per cent struggling with financial information compared to 17 per cent of men.

“Financial literacy plays a crucial role in our everyday lives, from using buy now, pay later schemes, to opening and closing bank accounts and applying for a mortgage,” Cannings Strategic Communications chief executive Luis Garcia said.

“Yet most Australians admit they find it near impossible to understand the information provided by financial institutions and others, which means it is increasingly tougher for them to make informed decisions.”

The bulk of participants called for better financial education in schools as the top solution to poor financial literacy.

The education system is falling short on financial education. Financial knowledge in Australia was on the decline, according to 2021 research from the University of the Sunshine Coast.

The academics noted the absence of an independent financial-literacy strand in the Australian curriculum, aside from a unit within maths.

As well as better education in schools, Garcia said financial institutions should consider using plain English wherever possible.

People interact with financial institutions anyway

Poor financial literacy hasn’t stopped people investing. Around 82 per cent of those surveyed put a slice of their salary into savings or investments.

Most people asked family or friends for advice (40 per cent), while 28 per cent relied on mainstream financial media. Only 21 per cent used professional financial advisers.

Social media and ‘fin-fluencers’ - financial influencers - were also common sources guiding their financial decision-making.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting