Have you ever heard the term “smart beta”?
The use of it and other bits of financial jargon is one of the dumber things financial professionals and the entire investment and financial business engage in, especially in dealing with the investment public. (I’ll explain “smart beta in plain English in a minute.)
Jargon Is OK, but…
Most industries and professions have their own lingo, usually a form of shorthand to speed things up since most people who engage in the same kind of work understand what the abbreviated terminology means. Pilots heading for a landing communicate with control towers in their own code, but when they get on the PA system to announce that you’ll be landing at O’Hare in ten minutes, they don’t mention vectors or the flight’s squawk number.
Finance is different. Many advisors and financial companies lapse into jargon because: a) they think it makes them sound smarter; b) they are too lazy or too self-absorbed to take the time to explain something complex in plain English; or c) they don’t know what it means either.