If you ever find yourself scratching your head at document after document and form after form as you go through your life, and you wonder whether it's just you who doesn't seem to understand papers that everyone else deals with, too. it's not you. It's the forms and documents. They're simply confusing.
The brand strategy firm Siegel & Gale has released the results of their latest quarterly "Perplexity Poll," and the results aren't pretty for many entities. Here are some results:
- The five most perplexing information sources are insurance documents, financial documents, legal documents, product instruction manuals, and computer-related documents.
- The five most-difficult-to-understand documents are mortgage applications, health insurance benefits forms, federal income tax returns, newspaper stock market listings, and investment account statements.
- The five documents rated easiest to understand were payroll stubs, checking account statements, airplane safety instruction cards, credit card statements, and catalog order forms.
Why are some so clear?
As I scanned the three lists above, wondering why some things are so complicated and some so clear, I had a few thoughts:
For starters, some of the documents that are easy to understand are that way because of motivation. Airlines have little reason to want uninformed and confused passengers in the unlikely event of an emergency. Lives are at stake, and they want everyone to know what to do. Similarly, mail order businesses depend on customers filling out order forms. They'd kill their own business if these forms were difficult to understand and use.
Credit card statements and checking account statements, on the other hand, may be clear mainly because they're not conveying very complicated information. One lists all your cash inflows and outflows, which are usually limited to only a few different kinds (ATM transactions, interest payments, checks written, etc.), and the other lists all your purchases and payments and includes your debt totals, as well.
Why are some so murky?
Let's consider some of the documents that got low ratings. It's hard to imagine some of them being anything but complicated because their subject matter is complicated -- think of legal documents, for example, or product instruction manuals, including ones for computers or software. Still, even these items could be improved. If you compare manuals for five different brands of computers, you'll likely find that some are much clearer than others. To some degree, it depends on the underlying product and how it was designed. Some products, though they may be complex, are still simple to use. Another thought is that if computers were more robust and didn't experience failures of so many kinds, manuals wouldn't need to devote so much space to troubleshooting.
Tax return forms were cited as being confusing. This is no surprise to me. I remember hearing that an astonishing percent of the time, when we call the IRS with tax-related questions, we get incorrect information from IRS employees. It's easy to conclude that they're incompetent -- but the blame should rest more on our tax system and its complexity.
A CATO Institute article noted that ".income taxes are hard to understand and the rules now span 60,044 pages, according to CCH Inc. Americans are baffled by the complex rules on capital gains, savings plans, education incentives, and other items. The IRS is also baffled -- recent Treasury investigations found that IRS employees gave incorrect tax answers anywhere from 55 percent and 83 percent of the time."
But let's move on to the other financial documents.
Stock market listings
Many people are befuddled when reading stock listings in newspapers. This is reasonable, as few of us are ever taught how to read such things. Online stock quote services such as those you'll find in our own Quotes & Research area can be even more confusing, as they offer you even more information.
Here's some help, though -- an article I prepared a few years ago, explaining how to make sense of an online stock quote.
Investment account statements
These forms include brokerage statements and savings plan statements, such as for 401(k) plans. Why would they be confusing? Well, there are several reasons.
Many brokerages probably aren't eager to give you all the information they can. For example, it might not help their cause (profits!) if you notice that you've lost 25% on that Lucent
Get a better brokerage
With brokerages, as with most products and services, it pays to shop around. The brokerage you use may not be the one best suited for you -- not only because of brokerage statement clarity but also perhaps because of commission costs, account maintenance fees, customer service responsiveness, availability of local branches, the range of mutual funds offered, and so on.
Contact a healthy handful of brokerages and gather information on them. Ask for a copy of a sample statement to see what it looks like. The North American Securities Administrators Association and the Securities Industry Association offer a brochure, "Understanding Your Brokerage Account Statements," that is helpful. I invite you to poke around our Broker Center, too, as it offers additional guidance on comparing brokerages, as well as details on several brokerages that support the Fool.
You might also be interested in these articles:
- Which Brokerage Is Best?
- The Return of Chuckie
- Brokerage Statement Bewilderment
- Don't Get Blindsided by Your Broker
- Rating the Low-Cost Brokerages
"Simple" is smart
The folks who conduct the Perplexity Polls have come to some conclusions that are valuable for businesses. By providing clear communications, businesses can:
- Increase customer satisfaction
- Strengthen relationships with customers
- Boost or at least maintain brand loyalty
- Avoid costly mistakes, such as when people misinterpret medical or financial information
- Reduce calls to customer service
- Develop a valuable competitive edge
What do you think about all this?
Share your thoughts on bewildering documents and their implications for businesses, individuals, and investors on our Commentary discussion board. Or just drop in to see what others are saying.
Selena Maranjian is bewildered by much more than just documents and forms. She owns no stock in any companies mentioned in this article. For more about Selena, view her bio and her profile. You might also be interested in these books she has written or co-written: The Motley Fool Money Guide and The Motley Fool Investment Guide for Teens . The Motley Fool is Fools writing for Fools.