Improving Financial Education and Literacy
As governments face increasing debt burdens and companies too face significant cost burdens, there is a clear movement towards individual responsibility for financial planning for retirement. This movement is happening at precisely the time that individuals themselves are feeling more insecure about the future in the face of declining job security and the increased reluctance of financial institutions to provide credit.
People face bewildering challenges in navigating the complex landscape of financial products and providers to reach the most efficient solutions for their retirement needs. Of course, there are intermediaries that could in principle help them, but in practice these intermediaries are more often than not riddled with conflicts of interest and high charges.
At the core of this issue is the need to increase individual capability to make financial decisions. As long as people have relatively low levels of financial education and literacy, they will be prey to problems with either high charges or inappropriate products.
But efforts to increase financial literacy have proven elusive. When financial education sessions are provided by industry, it is closely connected with the sales process, which is not well trusted by consumers. And when they are provided by government, subsequent application in the real world often proves difficult.
What are new solutions for improving financial education and financial literacy? How can social and other new media be used? What new approaches for regulation and supervision to improve performance should be adopted?