“Whatchu Talkin’ ‘Bout, Willis?” — The Importance of Proper Language in Financial Literacy

Abstract

Words matter. The use of imprecise or improper words can introduce an element of confusion or ambiguity. In finance, accuracy in language is particularly important because clarity of communication can impact on deals, valuations, and investment decisions. The use of sloppy words or statements can also lead to questions about the individual’s professionalism, competence, and degree of financial literacy. Finance professionals such as analysts and financial planners should give thoughtful attention to the terminology they express, as subtle differences or miscommunications could lead to decision-making errors or introduce questions about the credibility and professionalism of the individual.