I recently amended my motor insurance policy to cover my daughter’s use of my car for her work. I went through my broker and a couple of weeks later the insurer’s document supposedly detailing the amendment arrived. I say supposedly because no specific mention was made of the change I had requested.

Most of the document seemed simply to repeat the terms of the original policy. I filed the papers away but the thought nagged away that there had been a misunderstanding and maybe my daughter was not covered. I called the broker again. He confirmed the details of our original conversation and said the paperwork did provide the cover I had requested. It just didn’t say so.

I was reassured but was left wondering whether this was typical of the way the financial services industry fails to communicate with its customers. It certainly seems to be the case.

A recent survey found that 60 per cent of the people polled admitted to not reading the financial correspondence they received. Pension information, in particular, was seen as being the most poorly presented and difficult to understand, the survey by Docucorp found.

The issue of poor communication has attracted the attention of the regulators. The Financial Services Authority is currently monitoring the mortgage sector to see how well it is sticking to the rules on providing basic information to customers.

Companies are obliged to supply customers with an initial disclosure document that details the service it provides, and a key facts document that gives personalised details about cost and risk. The aim of the new rules is to stamp out misselling. But a recent mystery shopping exercise found that many lenders and brokers were failing to comply.

Key facts documents are also intended to help the purchasers of motor insurance but as a reader of these pages pointed out recently, they are not always made available when a policy is renewed, even if significant policy changes are made.

Pressure from the insurance industry meant that a requirement that key facts documents be provided for renewals as well as for new policies was dropped. Insurers are required to include a statement in renewal letters that sets out any changes to the cover compared with the previous year. But the small print in these documents can run to a dozen pages.

The proliferation of documentation that is generated with any financial transaction can make it difficult for the customer to identify what is important. But even if the paperwork is kept to a minimum, the use of jargon can baffle the layman.

The Association of British Insurers’ Raising Standards initiative aims to improve the clarity of the documents set out by its members. This too relies on a “key features” document that is meant to allow customers to compare the different products on offer.

Another long-established player in the field of combating obfuscation, the Plain English Campaign, says the legal profession and financial services industry remain the principal offenders.

The financial services sector cannot be expected to shoulder sole responsibility for ensuring that customers buy the right product or service. There is an obligation on the customer to take care.

Many surveys have shown that customers are not particularly financially aware – in part because of the complexity of the finance industry. Regulation also plays a role in the way the industry presents itself to its customers. And it is clear that many companies in the sector have made improvements to their paperwork.

But further progress is needed. Three areas for action remain. First, companies must ensure that as they update their documentation and launch new products, plain English continues to be given a high priority.

Second, plain English that lacks any context is little help. The letter that I received from my insurer was in reasonably clear English. But it bore no relation to my specific request for additional cover.

Finally, the information must be provided at an appropriate point in the selling process – at the time when the customer needs it to make a sensible decision.

Clearer communication could even help the financial services industry re-establish its reputation with the customer. A series of misselling scandals means many are unwilling to give the industry any benefit of the doubt.

charles.batchelor@ft.com