Financial Jargons

Oftentimes Financial Advisors are guilty of speaking jargons.


We use complicated and specialized words like wealth planning, diversification and holistic financial plans, as if everyone understood the word and all that it means when it took us hours of lecture and years of study.

But as a conference speaker thankfully reminded today, people don’t care what you know, until they understand what you are saying.

And so as punishment for the many times I use canggih Financial Planning words unintentionally, I shall share some interesting ways from this speaker on explaining jargons.


The first one is about independent, impartial advisory without tied agency restrictions.

When a financial advisor say this sentence, he/she would be very excited, satisfied, and proud. But I guarantee that almost everyone else hearing this sentence will just nod and promptly forgot about it.

Now let’s try retelling it in a story format:

Imagine you are traveling for a holiday, you search high and low for a good deal, you go to airline A, compare it with airline M and airline E, selecting for price/comfort/convenience. And you do this for a holiday which will last you a week.

Now you are buying an insurance, which will affect the majority of your adult life with the monthly premium payments and the benefits will have lasting consequences for you and your love ones. And you do this by listening to only one tied agent which is pushing only one company’s product. Wouldn’t it make more sense to compare ALL the available products in the market and then selecting from them just like the way you did with the airline?

And with this story, doesn’t the above sentence now make sense and have an impact?


So let’s try another jargon: diversification.

Does the word have effect on you? No?

How about: a portfolio of asset classes.

Still no effect?

How about: ‘do not put all your eggs in one basket’.

Suddenly it becomes something that everyone can visualize.


And finally, the tough one: financial planning.
“Financial planning is good for you.”

Again everyone will nod politely and quickly forget about it. Very few people have actually seen a proper financial plan and can then visualize it.

But put into three separate questions that everyone can visualize:

“What happens when you survive?” (Retirement Planning)

“What happens when you die?” (Dependent Protection and Estate Planning)

“What happens when you survive but are ill?” (Income Replacement and Medical Planning)

Answer these three questions and you have Financial Planning. Now isn’t this easier?

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