Untitled Episode

Summary

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WSJ Your Money Briefing – July 21, 2026

Episode Theme:

How the SEC Wants Financial Advisors to Speak Your Language

This episode, hosted by Jerry with guest Jason Zweig (Wall Street Journal Intelligent Investor columnist), explores the Securities and Exchange Commission's (SEC) new push to make financial disclosures easier to understand. The conversation investigates why jargon persists, the problem with current approaches, and whether the latest regulations make a meaningful difference for investors.

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Key Discussion Points & Insights

1. The Diversity Push in Corporate America

[00:40 – 02:10]

• Companies face external pressure from investors and legislators to diversify C-suites, especially regarding gender.
• Many firms now tie pay and reviews to diversity targets.
• S&P Global Market Intelligence study: Companies with female CFOs are 6.2% more profitable in the first 24 months after appointment.
• Only 13% of CFOs and 9% of CEOs at Fortune 500 companies are women.

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2. Why the SEC Stepped In: Confusing Disclosure Language

[02:11 – 03:42]

• Jason Zweig: “I think the main motivation for this new rule was the move toward best interest or fiduciary duty, the requirement that brokers, like investment advisors, have to put their client's best interest first.” [02:41]
• The lines between brokers and advisors are often blurred, confusing customers about what level of care they’re receiving.
• Unification under one standard (fiduciary duty) led to the need for clearer disclosures.

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3. The Complexity of Making Things Simple

[03:42 – 04:38]

• Jerry: The SEC’s new disclosure rule took “165,000 words to explain how advisors and brokers should simplify their language.” [03:42]
• Jason Zweig: “Making something easy is hard...The real problem is that…while it does give investors more of what they need to know in terms that are somewhat easier to understand, I think it overestimates the knowledge base of a lot of American investors...Most people need to be told why something is important, not just to be told what it is.” [03:52]

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4. How Much Are Consumers Really Reading?

[04:38 – 05:52]

• The SEC, via the Rand Corporation, discovered that consumers spend a shockingly short time reading disclosures.
  • People spend about 47 seconds on fees and expenses.
  • Only 22 seconds on conflicts of interest.
• Jason Zweig: “It’s hugely important. But one of the things we know from a lot of research in psychology is it’s hard for people to process why conflicts of interest matter.” [05:14]

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5. “Blazey” Consumers: The Human Factor

[05:52 – 06:28]

• Jason Zweig: Introduces the term “blazey” (busy + lazy) for why people don’t read disclosures:
  • “I don’t think people are stupid or irrational...Part of what it means to be human today is to be swamped with responsibility... and you don’t want to think harder than you need to.” [05:58]

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6. Are Financial Firms Motivated to Confuse?

[06:28 – 07:24]

• Jerry: Do firms just not understand modern attention spans?
• Jason Zweig: “I might take a more cynical view... Confusion and complexity are the friend of the seller...but they’re the enemy of the buyer...The more complex and impressive-sounding a financial firm can make something sound, the more likely it is that they’ll sell it to you, and the more likely it is it’s bad for you.” [06:45]

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7. Congressional Efforts: More Testing, More Clarity?

[07:24 – 08:53]

• Rep. Sean Casten (IL) sponsored a bill to require the SEC to do more hands-on consumer testing.
  • Would require one-on-one feedback from actual investors before rolling out new disclosures.
  • The SEC claims it already does this, but the bill demands more thorough testing.
  • “People said the new disclosure was much better than the old one. But...when they got tested on how much time they spent understanding it, the results were not so encouraging.” [08:06]

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8. Fees and Conflicts: Explaining the “Why”

[08:54 – 10:42]

• Jason Zweig: “People need to know why is reading this disclosure good for me? Why should I know the answer to this question?...of all the elements to an investment program, the only one that is predictable is your fees and expenses. The more you pay, the less you will keep.” [09:15]
• On conflicts of interest: “No financial advisor, no person is conflict free. And those conflicts can affect the quality of the advice people get. And they need to be told why there’s a disclosure about conflict of interest, not just what the disclosure says.” [10:12]

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9. Will Things Get Better?

[10:42 – 11:05]

• Jason Zweig: “I think the new disclosure rule is progress. It makes things better than they were before and it does leave firms room to make their disclosures even simpler. But we have a long way to go.” [10:53]

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Notable Quotes & Memorable Moments

• On why jargon persists:
  • “Confusion and complexity are the friend of the seller of financial services, but they’re the enemy of the buyer.” — Jason Zweig [06:45]
• On the need for context:
  • “People need to be told why something is important, not just to be told what it is.” — Jason Zweig [03:52]
• On human nature:
  • “We're very busy and all of us are a little bit intellectually lazy.” — Jason Zweig [05:58]

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Timestamps for Important Segments

• [02:41] — Why the SEC got involved; confusion over fiduciary duty.
• [03:52] — The challenge of simplifying financial disclosures.
• [04:45] — Consumer testing results: How little time investors spend reading disclosures.
• [05:58] — The "blazey" consumer and human attention.
• [06:45] — Why complex language benefits financial sellers more than buyers.
• [08:06] — Congressional pressure for better disclosure testing.
• [09:15] — The importance of explaining "why" about fees: “The more you pay, the less you will keep.”
• [10:53] — Will regulation actually work? It’s progress, but “we have a long way to go.”

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Summary

This episode provides a sharp analysis of how and why the SEC is pushing to cut through the "gobbledygook" of financial advice. Despite recent progress, disclosures remain confusing to most investors—largely because they fail to explain not just the "what" but the essential "why" behind fees, conflicts, and recommendations. Human nature, corporate incentives, and bureaucratic inertia all shape a landscape where clarity still lags behind. As Jason Zweig concludes, the new rules are a step forward, but true simplicity and effective communication remain elusive for the average investor.

Transcript

[Annemarie Fertoldi]

Still running global payroll like a relay race Deal replaces fragmented payroll vendors with one global system. No third parties hire, manage and pay teams in 150 plus countries with in house local experts and white glove delivery and deal plugs into what you already use. Workday SAP Netsuite operate like a local everywhere. Visit d e l.com WSJ that's d e e l.com WSJ. Here's your money briefing. I'm Annemarie Fertoldi at the Wall Street Journal in New York. Oftentimes, financial advisors leave customers confused In a blizzard of jargon and gobbledygook, our JR Whalen sat down with Wall Street Journal Intelligent Investor columnist Jason Zweig, who explains how the securities and Exchange Commission is directing advisors to clear up confusing language. We we'll have more on that coming up. But first, some money in market headlines. More companies are trying to recruit more diverse candidates for their C suites after facing pressure from both investors and lawmakers to boost gender diversity in the executive ranks. Companies are also tying performance reviews and pay to diversity hiring targets. That's having a boost to the bottom line. A recent study by S and P Global Markets Intelligence found that companies with female chief financial officers are more profitable than those without. The study examined the largest 3,000 U.S. companies from 2002 to mid-2019. Those companies saw a 6.2% increase in profitability during the first 24 months after the appointment of a female CFO compared with those with male finance chiefs. Still, the number of female executives at large US companies is quite low. Last year, less than 13% of CFOs of Fortune 500 companies were women, and only 9% of companies in the Fortune 500 appointed female CEOs. Coming up, how the SEC is directing financial advisors to communicate more clearly.

[Jerry]

Yield Curve Relationship Summary Debt Service Coverage Ratio Fixed assets Terms like these are likely to turn up in brokers financial disclosures. The SEC has a new rule requiring advisors and brokers to simplify the language in their disclosure statements. But Wall Street Journal Intelligence investor columnist Jason Zweig is here. He says if investors still can't understand the language, it's not simple enough. So, Jason, what was the overall problem here? Why did the SEC feel it had to step in and get involved?

[Jason Zweig]

I think the main motivation for this new rule was the move toward best interest or fiduciary duty, the requirement that brokers, like investment advisors, have to put their client's best interest first. And there was a lot of concern that there would be confusion in the marketplace between investment Advisors and brokers and that consumers wouldn't necessarily understand the services they were being delivered.

[Jerry]

So best and good being sort of cloudy, fuzzy terms. They felt that there might be too much room there, too much wiggle room for organizations.

[Jason Zweig]

Exact. And there's also a lot of potential for confusion because many brokers act sometimes as advisors and sometimes not. So sometimes they have your best interest and sometimes they don't. So by unifying all those people under one standard, the thinking was, now we need a new kind of disclosure.

[Jerry]

So, Jason, the SEC passed this rule and it needed what, 165,000 words to essentially explain how advisors and brokers should simplify their language?

[Jason Zweig]

Yeah, that's correct. Well, I mean, to be fair, making something easy is hard. And I think the length of this disclosure rule or the length of this rule about disclosure shows just how hard it is to make it simple. I think the real problem with this regulation is that while it does give investors more of what they need to know in terms that are somewhat easier to understand, I think it overestimates the knowledge base of a lot of American investors. And the thing that most people need is to be told why something is important, not just to be told what it is.

[Jerry]

And the SEC hired the Rand Corporation to do some testing and surveying and preparing this rule. The results were not what they expected.

[Jason Zweig]

Well, I don't know what they expected.

[Jerry]

Well, maybe. Maybe not what they had hoped.

[Jason Zweig]

Yeah. What they found. People typically spend an incredibly short amount of time processing this kind of information. As I recall, I think the amount of time people spent reading about fees and expenses was 47 seconds. And the amount of time they spent on conflicts of interest was 22 seconds.

[Jerry]

And conflict of interest is very important information in these disclosures.

[Jason Zweig]

It's hugely important. But one of the things we know from a lot of research in psychology is it's hard for people to process why conflicts of interest matter. And the easiest way I use to explain that is most of us think of ourselves as capable and very ethical people, which most of us probably are. But because we think of ourselves that way, we sometimes have a hard time imagining that someone else might act against our best interest. So people are a little naive about how common and potentially damaging conflicts can be.

[Jerry]

You've said that investors don't read financial disclosures because they are blazey. What does that mean?

[Jason Zweig]

Well, that's a little term I use to combine two very basic concepts. Busy and lazy. I don't think people are stupid or irrational. They're not. But what they are is they're human. And part of what it means to be human today is to be swamped with responsibility and demands on your time. And also you don't want to think harder than you need to. So we're very busy and all of us are a little bit intellectually lazy

[Jerry]

is part of the problem here. The fact that the financial companies have not really captured what the mindset is of people these days with just millions of little bytes of information flying around all day long, and they haven't figured out how to find that A to B communication line to communicate their message effectively.

[Jason Zweig]

I might take a more cynical view. I might say that the financial companies have figured out the best way to communicate, but it's the best way for them. And I think confusion and complexity are the friend of the seller of financial services, but they're the enemy of the buyer or consumer of financial services. And so the more complex and impressive sounding a financial firm can make something sound, then the more likely it is that they'll be able to sell it to you and the more likely it is that it's bad for you.

[Jerry]

And Congress is now getting involved.

[Jason Zweig]

Representative Sean Kastin from Illinois sponsored a bill that recently passed the House. It is all but certain not to pass the Senate. It doesn't have a lot of bipartisan support. He's a Democrat. But the bill would require the SEC to do extensive consumer testing before it introduces rules that require new disclosures for individual investors.

[Jerry]

What I think is intriguing about that is that the bill would require one on one meetings, direct meetings with people. So I guess that you can gauge their thinking and gauge their thought process. And do they kind of stop and grasp for words and grasp for thoughts?

[Jason Zweig]

The SEC would argue that the bill requires the agency to do what it has been doing and therefore maybe isn't necessary. But my interpretation of the scope of the bill is that it calls for additional testing beyond what the SEC already has done. Arguably, the tests that the SEC did before it rolled out this new disclosure showed that people don't understand disclosures very well, including these. Now, what the SEC did find is that people said the new disclosure was much better than the old one. But then when they got tested on how much time they spent understanding it, the results were not so encouraging.

[Jerry]

So it's better, but a long way to go.

[Jason Zweig]

Yeah.

[Jerry]

You know, when an investor is considering a financial product, I guess one of the first questions that comes to mind is what is this going to cost me? And figuring out what fees an advisor charges doesn't seem to get much Less fuzzy. Under this new Simplicity rule, you have an idea as to what financial disclosures should say before explaining their fees and expenses to investors?

[Jason Zweig]

Yeah. What I think is missing from this regulation is and from pretty much all the approaches to disclosure we have in the marketplace is they all focus on the what and they completely neglect the why. People need to know why is reading this disclosure good for me? Why should I know the answer to this question? And so if you're reading a disclosure about fees, the first thing that disclosure should explain is, why do fees matter to you? So I would like to see a disclosure that starts by saying, of all the elements to an investment program, the only one that is predictable is your fees and expenses. The more you pay, the less you will keep. And that puts it in context that I think would make it more valuable for people.

[Jerry]

And same thing about why conflicts of interest are important.

[Jason Zweig]

People need to be told upfront that they are likely to assume, with or without evidence that the person they're talking with has their best interest at heart, when in fact everyone has conflicts of interest. And no financial advisor, no person is conflict free. And those conflicts can affect the quality of the advice people get. And they need to be told why there's a disclosure about conflict of interest, not just what the disclosure says.

[Jerry]

So, Jason, any light at the end of the tunnel here? Will things get any more simple? Will the SEC require these advisors to go back to the drawing board and kind of whittle things down some more?

[Jason Zweig]

I think the new disclosure rule is progress. It makes things better than they were before and it does leave firms room to make their disclosures even simpler. But we have a long way to go.

[Jerry]

All right, that's Wall Street Journal intelligent Investor columnist Jason Zweig with us. J. Jason, thanks for coming on the show.

[Jason Zweig]

My pleasure. Thanks, Jerry.

[Annemarie Fertoldi]

And that's your money briefing. I'm Annemarie Fertoldi in New York for the Wall Street Journal. Still running global payroll like a relay race. Deal replaces fragmented payroll vendors with one global system. No third parties hire, manage and pay teams in 150 plus countries with in house local experts and white glove delivery and deal plugs into what you already use. Workday, SAP, Netsuite, operate like a local everywhere. Visit deel.com WSJ that's de L.com WSJ.