Asking when you don't understand benefits you and your clients. Pretending to understand can discourage disclosure and support poor decision making.
When I began working with people with learning disabilities, I was told "don't pretend that you've understood what someone says to you". This seemed fairly obvious advice until I was in the embarrassing situation of having to say "I'm sorry: I didn't catch that" for the third time in five minutes.
Whether faced with a speech impediment or bombarded with abbreviations & unknown references, it is tempting to nod in agreement and try to move on. In either case, the principle is the same: by attempting to avoid embarrassment now, you're preparing the ground for future, potentially much more serious, problems.
To admit that you didn't understand unclear speech (or worse, still don't understand after three repetitions) seems to be risking your rapport with the client and your aura of professionalism: "this person is meant to be a specialist: why don't they understand me?".
The risks of bluffing are far greater than the risks of owning up. If you didn't understand, your reply is likely to be neutral when a more specific response was indicated. In the worst case, you may miss important information and, by missing it, leave the client with the impression that their information is not important (or that you are unwilling to address it).
When a client uses a technical term you don't recognise, you may fear a challenge to your professional authority. If you believe that your working relationship with your client depends upon them seeing you as all-knowing, you may wish to consider whether your client has ever seen you in such a light!
Dedicating yourself to honest communication can lead to some awkward situations, but hopefully no more awkward for your client than for you. If they see that you are genuinely trying to understand, clients may work all the harder to convey their message to you.
Asking when you don't understand is probably more problematic in dealings with colleagues than with clients. Using abbreviations or terms the other person is unlikely to understand is a common tactic in professional power-plays. A common tactic is to make a note and research the subject later, but this dooms you to spend the rest of the meeting or case conference unsure of what may have been a key point, dangerous if there are decisions to be made.
My experience is that if I ask for clarification in a meeting, at least one other person will chime in. Half the time, the person I ask for clarification can't provide it! If you're not embarrassed to ask questions, you can rapidly create a culture where asking is the norm. You won't always have the same job, but if you're not willing to risk embarrassment in front of your current colleagues or clients, it is unlikely that you ever will.