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Category: Finance

No plain, no gain: Why finance and legal should swap obscure language for open

By Anna Foster, senior writer at verbal branding agency Reed Words

When you write in ‘plain English’, you use simple words, short sentences, clear headings and concise paragraphs. But it’s something finance and legal departments can struggle with, as they rely on jargon to communicate complex messages.

Simple writing needn’t change or simplify what you’re trying to say. Instead, it just means more people will understand your writing quickly and easily.

The first rule of copywriting is to think about your reader. They could be reading in a hurry. They may find reading difficult, or don’t speak English as their first language. (Or they might be an expert in your subject – but even experts appreciate simple language.)

Why are we talking about financial and legal language now?

Plain language isn’t a new idea. In fact, its supporters date all the way back to the 16th century. In 1596, a British chancellor cut a hole in a 120-page court document he thought was too long. He then ordered the lawyer who wrote it to stuff his head through the hole. The unfortunate chap was paraded around Westminster Hall for everyone’s amusement.

More recently, New Zealand passed a bill to make sure its government speaks clearly. Members say this will strengthen democracy by helping people understand their rights and what they’re being asked to do. It’s also a priority for the UK government, as shown with guidance on that says content should be clear, meaningful and trustworthy. The same is true across many other organisations, including Transport for London, which asks for everyday words instead of jargon or official-sounding terms for its internal and external communications.

Plain English is good for government. But is it good for business?

In a word: yes. In the financial and legal worlds, research suggests simple writing offers significant returns on investment. In a 10-K annual performance report, plain writing attracted more investors and saved money and time spent on audits. Another study found that when the readability of a fund’s annual report slightly dropped, the fund reduced in market value by 2.5%.

Cornell accounting professor Kristina Rennekamp discovered something similar: simple writing ‘increases investors’ beliefs that they can rely on the information’. In other words, it made investment advice more convincing and trustworthy.

Simple language can save money and time in the legal and financial spheres, too. GE Aviation found that when a contract left out legalese and financial jargon, the time it took to negotiate fell by 60%.

What are some ways to simplify legal and financial language? 

Free resources like Hemingway App are useful to check the readability of your writing. Here are a few other ways to make sure legal and financial language is as accessible as possible:

  • If there’s no plain English alternative to the word you’re using, explain what it means
  • Explain what acronyms mean the first time you use them, and don’t form new ones
  • Move from the abstract to the specific. A good example from the US Securities and Exchange Commission plain English handbook is:

Asset ➡ Investment ➡ Security ➡ Equity ➡ Stock ➡ Common stock ➡ One share of IBM common stock

  • Explain abstract points with a hypothetical scenario involving one person
  • Watch out for long words or phrases which don’t add meaning:
  • ‘Alter or change’
  • ‘In terms of’
  • ‘Good and sufficient’
  • ‘Last will and testament’
  • ‘Null and void’ (also: ‘totally null and void and of no further force or effect whatsoever’…)
  • ‘Peace and quiet’
  • ‘True and correct’
  • ‘Undertake and agree’
  • ‘With regards to’

Finally, think about getting a fresh perspective. You might be so immersed in your world that you can’t recognise what’s complex and what’s straightforward. And that’s where Reed Words can help.