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Why financial language should be easy to understand

byThe i-vest Team
byThe i-vest Team
The i-vest Team
Group 7 Article, 3 min read

Finance and wealth management do not need to be hard to deal with or difficult to understand. Here’s why.

What is stopping you from maximizing your finances?

For many people, it is a fear of not understanding what they are getting involved in. Financial language can be confusing. The truth is, it doesn’t have to be this way, and it may even be detrimental to your investments and your future.

But what is clear, and what is confusing? Actually, the financial industry has a definition for “understandability”. Granted, this standard refers to the accounting side of a business, but it is worth considering in the context of simple banking and finance as well.

According to the definition, understandability requires financial information to be presented in a way that is easy to comprehend. Easy is defined as complete, concise, clear, and organized. What is crucial is that the idea is not limited to accountants, who would be expected to have expert knowledge when it comes to reading financial information.

Instead, the concept assumes that the readers would only have a reasonable amount of knowledge of accounting, general economic activities, and the business they are looking at. They are not accounting or finance experts.

Applying this concept to financial planning for you as an individual or your family, the same principles apply. Offering complete information about a financial product, presenting it clearly, concisely, and in a well-organized manner should be the standard.

Reality can look a little different. Complicated terms and conditions, often running to dozens of pages, are simply off-putting. Many customers lose confidence in the financial product they are considering. They may even lose trust in their financial advisor because of it, or they may simply decide to put off investing until a later date.

Finance and banking are for everyone and do not need to be difficult. That’s why i-vest was created!

Making finance your friend

Finance and banking are for everyone and do not need to be difficult. That’s why i-vest was created!

Yet it is also true that no matter how clear the information is, it takes some initiative on the side of the investor to take charge of their financial life. Here’s why building your financial knowledge is worth the time and effort: the earlier you take charge of your finances, the sooner you will be able to reach your goals. Ignoring your finances for fear of the unknown creates more distance from those targets.

With the importance of financial planning established, it’s time to bust a few myths about banking and finance.

Finance, by nature, is difficult to understand: Like any other industry, finance does have a specialist language and specific terms associated with individual products and processes. i-vest is dedicated to demystifying these terms, so you do not need to speak finance to understand, and it’s a shift we hope to bring to the financial landscape at large.

Finance is boring: Organizing your finances is about planning your future – and your future is anything but boring. Think of it as a challenge to map a path towards a goal. You define that goal, inventory your resources, and then get to work allocating them in the best possible manner. Managing banking and finances well is about creating a strategy and identifying the best tactics to achieve your goals.

Finance is only for math geniuses: Just like the language of finance does not need to be complicated, you do not need to be a math genius to understand how your money is doing. Once you have a good understanding of your banking and investment strategy, dashboard overviews and regular updates will make the math easy to follow.

Finance is time-consuming: Yes, building your knowledge and creating your personal wealth strategy is an investment in terms of time – but it is an investment in your future happiness and peace of mind. Besides, there is no need to do it alone. Involving a financial advisor is a good idea if your time is limited.

Making the most of your savings and investments is the best way to ensure you have the future you want – and it all begins with building your knowledge and creating a positive relationship with your finances.

i-vest and you

Making the most of your savings and investments is the best way to ensure you have the future you want – and it all begins with building your knowledge and creating a positive relationship with your finances. i-vest is here to help you do just that (find out more about us and our purpose here. We are growing daily and value your input enormously, so please do not hesitate to reach out with your input, your questions, and your suggestions! You can reach us at media@alpian.com.

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Disclaimer:
Alpian has submitted an application for a full banking license to Switzerland’s Financial Market Supervisory Authority (FINMA). Content of this publication is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.

Group 7 Article, 3 min read
About the author
The i-vest Team
The i-vest Team

Driven by a need for clarity and simplicity on all things wealth related, the i-vest team works closely with senior financial experts and advisors to dive deeper into the world of finance, investment and wealth to make it more relevant for you.