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Technical Language, Advice Understandability, and Perceptions of Expertise and Trustworthiness: The Case of the Financial Planner

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  • Therese A Joiner

    (Department of Accounting and Management, La Trobe University, VIC, 3086. Email: t.joiner@latrobe.edu.au)

  • Lynne Leveson

    (Department of Accounting and Management, La Trobe University, VIC, 3086)

  • Kim Langfield-Smith

    (Department of Accounting and Finance, Monash University, Clayton, VIC, 3168.)

Abstract

This study examines the relationships among the extent of use of technical language in an advisory context, the understandability of the advice offered, perceptions of the adviser's expertise and trustworthiness, and the subsequent persuasion effects. The responses of 186 participants, randomly assigned to view one of two videotapes (one tape low in the use of technical terms, the other high), were analysed using structural equation modelling. The results indicate that the overuse of technical language in a lay client consultation reduces clients' understanding of the advice offered. Lowered advice understandability negatively affects clients' perceptions of the professional adviser's expertise and trustworthiness and, subsequently, client's intention to seek the professional's advice.

Suggested Citation

  • Therese A Joiner & Lynne Leveson & Kim Langfield-Smith, 2002. "Technical Language, Advice Understandability, and Perceptions of Expertise and Trustworthiness: The Case of the Financial Planner," Australian Journal of Management, Australian School of Business, vol. 27(1), pages 25-43, June.
    • Handle: RePEc:sae:ausman:v:27:y:2002:i:1:p:25-43
    DOI: 10.1177/031289620202700102
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    References listed on IDEAS

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    Cited by:

    1. Athota, Vidya S. & Pereira, Vijay & Hasan, Zahid & Vaz, Daicy & Laker, Benjamin & Reppas, Dimitrios, 2023. "Overcoming financial planners’ cognitive biases through digitalization: A qualitative study," Journal of Business Research, Elsevier, vol. 154(C).
    2. Petropoulos, Fotios & Apiletti, Daniele & Assimakopoulos, Vassilios & Babai, Mohamed Zied & Barrow, Devon K. & Ben Taieb, Souhaib & Bergmeir, Christoph & Bessa, Ricardo J. & Bijak, Jakub & Boylan, Joh, 2022. "Forecasting: theory and practice," International Journal of Forecasting, Elsevier, vol. 38(3), pages 705-871.
      • Fotios Petropoulos & Daniele Apiletti & Vassilios Assimakopoulos & Mohamed Zied Babai & Devon K. Barrow & Souhaib Ben Taieb & Christoph Bergmeir & Ricardo J. Bessa & Jakub Bijak & John E. Boylan & Jet, 2020. "Forecasting: theory and practice," Papers 2012.03854, arXiv.org, revised Jan 2022.
    3. Jesse Arman & Joshua Shackman, 2010. "The impact of financial planning designations on financial planner income," The Service Industries Journal, Taylor & Francis Journals, vol. 32(8), pages 1393-1409, November.
    4. Evita Allodi & Enrico M. Bocchino & Gian P. Stella, 2023. "Understanding Insurance Knowledge: A Brief 7-Item Measure," International Journal of Business and Management, Canadian Center of Science and Education, vol. 16(2), pages 1-65, February.

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