Speaking to ifa, director of Brisbane-based advice firm Comsure Financial Solutions, Sean Litchfield said the lack of high school education on financial literacy and planning skills is a catalyst for ongoing generational poverty.
“What terrifies me is, when talking to young people, how little they know about the financial world. What concerns me is the risk that each generation will hand on its poverty to the next,” he said.
Financial adviser at RGM Financial Planners Paula Siddle told ifa the issue of financial illiteracy among high school students is significant.
“I have met with young individuals (not just within my job) … who do not understand that superannuation is part of their salary, or what the repercussions are if you do not pay your phone bill … young people need to leave school understanding that there is a difference between wants and needs, budgeting and understanding contracts.”
Mr Litchfield added that the partnership between advisers and schools is crucial.
“Wealth gives people choices and opportunities. If mum and dad don’t understand how money works, kids need to be able to access that information from their school and if teachers are way too busy, drag advisers like me in,” he said.
Ms Siddle said, “It’s been a long while but I can always remember taking more interest in a subject or topic in high school when we had an external resource such as someone attending class to answer questions – it felt more authentic and genuine.
“Maybe being a mum I am concerned that we have an overloaded education system and I would like to do what I can if this support is required and welcomed.
Mr Litchfield said increased adviser engagement with local school communities is key to upping the reputation of the industry.
“We have had a reputation in the past of looking out for ourselves and not particularly caring about what happens,” he said.
“Here’s a great way for us to give back. A lot of us have made substantial incomes and really good strong financial lives out of our profession – why wouldn’t we share this information amongst the local community?”
Timothy, I don’t think any of my client’s would say that the financial advice “industry” has failed
Respectfully Greg, that was the purpose of my article, to suggest financial literacy needs to be taught. I certainly, in spite of my dealer group’s association with ANZ, have never acted fraudulently,. And never will
What is even scarier is how so many rogue advisers have taken advantage of this lack of knowledge through fraudulent acts within their profession and earned a great deal of illegal money.Just simply tell the students not to deal with any banks for advice and they will have their future already sewn up through a independent adviser unlike the likes of the CBA and their subsidaries.
Greg, this is more than just being taken for a ride by “rogue advisers”, a lot of kids don’t understand the dangers of just “nimbling it”. Also not paying for your electricity bill, just switch providers without proper understanding of repercussions. Purchasing a dog without understanding ongoing upkeep costs. There are heaps of other examples but as Sean said, someone needs to help young people understand these things.
The correct people to teach kids is either the banks and insurance companies or ASIC and the government as the financial advice industry has clearly failed
Banks the correct people to teach kids??? God help us…