The effect of complex language on the perceived morality of financial instruments

Retail participation in equity markets remains low across many advanced economies, despite the economic and social benefits of private investment - particularly amid aging populations and strained pension systems. While limited financial literacy is often cited as a barrier, moral concerns may also deter engagement. This study examines whether the typically high linguistic complexity of financial communication has a detrimental effect on the moral perceptions of the described financial instruments. In a vignette-based experiment with a 2 (simple vs. complex language) × 5 (financial domain) design, participants assessed the comprehensibility of financial product descriptions and the moral concern about the described financial instrument. Results show that complex language reduces perceived understanding and increases moral skepticism toward financial instruments - even when moral content remains unchanged. Simpler language, by contrast, enhances clarity and mitigates moral concerns. These findings suggest that opaque financial language may unintentionally trigger moral resistance and distrust. The study highlights the need for not just better financial literacy, but also for clear and transparent communication to foster trust in finance.