The survey investigated how well members of the public recognised some of the many financial acronyms used by specialists, with the premise that understanding the industry goes together with knowing its shorthand.
The results showed that while there was a high awareness of more commonly used acronyms, this was countered by a lack of knowledge when it came to more detailed terms.
Of the 2005 people questioned, 92 per cent recognised APR as Annual Percentage Rate, 85 per cent of people understood IFA (Independent Financial Adviser) and nearly eight out of 10 knew FSA stood for the Financial Services Authority.
However, only 14 per cent knew KFI (Key Facts Illustration), while half of all those questioned could not identify LTV (loan-to-value).
Tim Hague, director of BM Solutions, said: “These findings offer an interesting insight into public awareness. For IFA, APR and FSA, the percentage recognition is encouraging. People are obviously beginning to recognise terms regarding where and how to get advice, but not the acronyms for the tools which have been designed to help them in their financial dealings. Organisations in the industry need to take steps in helping to educate consumers in the key terms which they will come across in their mortgage borrowing.”
Rod Murdison, proprietor of Murdison & Browning, said: “It does take a long time for terms to sink in. I think a lot of legislation brought in to protect the public is a mystery to them, so it doesn’t surprise me that they don’t know what a KFI is. Plus, all these acronyms change so frequently, why should the public keep up? Among the younger generation, the level of knowledge has doubled. I don’t think there’s any harm in not knowing every term, as long as they know the key ones.”
