Advisers not best to teach financial literacy, ASIC says

Recently, ifa reported that nearly 84 per cent of financial advisers are willing to volunteer their time coaching school students in financial literacy, with some advisers saying greater collaboration is needed between the advice and education sectors as students are leaving the school system wanting in basic financial skills.

As RGM Financial Planners adviser Paula Siddle, who is undergoing research on the topic, said, "We have a lot of young people leaving the education system and they have not had exposure to financial literacy or planning to develop these skills. It can only be beneficial for finance professionals and secondary educational institutions to be able to build long-term relationships.”

Speaking to ifa, ASIC senior executive leader for financial literacy Miles Larbey said the best long-term approach to the issue of financial illiteracy at a high school level is to educate teachers. Teachers can then deliver elements of financial literacy to students under different units in the curriculum.

“The whole approach for ASIC’s MoneySmart Teaching Program is about trying to build the capabilities and confidence of teachers to teach financial literacy in schools – it is a systematic approach to building that capability,” Mr Larbey said.

“There is also a component around teachers’ own personal financial capability - one thing that we find is that when teachers become involved in this program one of the things they say is ‘well I don’t feel that confident in my own finances and my own financial literacy’, so there is actually a companion part of the program that’s designed to support their own levels of financial literacy and capability.”

On the idea of advisers collaborating with high schools to run financial literacy programs, ASIC said that, while there is a role for committed professionals to engage with their local schools, the best way to build a long-term and sustainable financial literacy program is by building the capability and confidence of teachers.

“The thing to note about advisers going into schools and running programs is that schools and teachers are very busy and it’s entirely up to the principal to decide. Their priorities of course are the curriculum – making sure the kids get the learning they need under the Australian curriculum,” Mr Larbey said.

Mr Larbey said there are elements of financial literacy embedded in curriculum subjects such as mathematics, English, science, economics and business.

“Programs run by advisers that could be seen as complimentary programs are really useful but it would have to be depending on if that worked for that school,” he said.

“One of the angles that perhaps may be a good way to look at it is – some financial advisers are parents themselves and therefore would be connected to the schools that their kids attend - we would really encourage financial advisers to talk to the principal and talk to the parents about encouraging schools to engage with ASICs Money Smart Teaching Program.

“So in that way they’re supporting financial literacy in a way that benefits the whole school and all the students.”

“There is always a role for more ambassadors for financial literacy in schools so planners who are in a position to engage with their local school – and I don’t mean that they have to start turning up and running programs in schools – planners can still be opening up discussions with their local principals and teachers and promoting the benefits of getting involved in the program of ASIC MoneySmart teaching because that approach is designed to have a long-term change and make sure the next generation have the skills that they need to be successful consumers in adult life,” he said.