The value and effectiveness of the Government’s financial literacy programs for adults have been called into question as a number of new initiatives are introduced to tackle the issue.
Concerns were mostly based around pricey campaigns implemented in the past, such as the Understanding Money website.
In August last year, the former Financial Services Minister, Chris Bowen (pictured), announced the launch of a new educational website similar to Understanding Money, which would be developed by the Australian Securities and Investments Commission (ASIC) and cover areas such as superannuation, mortgages, budget planning and saving.
Wealth Within executive director Dale Gillham supported the introduction of financial literacy programs in schools, but questioned the Government’s ability to effectively attract consumers to educational websites that he said contained information already known to most Australians.
Gillham claimed advertising campaigns were unlikely to attract large numbers of consumers and fix the problem of financial illiteracy in Australia, instead suggesting the programs be brought to the people.
“You’ve got to go to places where people are and bring it to them, rather than trying to get them to come to you. I would be putting the education into community centres and schools,” he added.
“The perfect website to go to is the ASX [Australian Securities Exchange] website, but most people don’t ever even think to go there. Putting something on ASIC’s website — you’d be lucky to get anybody to visit,” Gillham said.
However, chairman of the Financial Literacy Taskforce Paul Clitheroe said as a result of the $13 million Understanding Money advertising campaign launched a number of years ago, more than one million people had ordered information booklets.
Clitheroe said the Federal Government’s $10 million financial literacy grant was the first step towards implementing financial literacy in all Australian schools, but also admitted adult financial education presented a bigger challenge.
“We can’t regulate or legislate that all adults must learn about money skills — it becomes a voluntary skill,” Clitheroe said. “Most of our research found the awareness of being good with money is improving year-on-year in Australian adults, but the real challenge now is how we [cause] behavioural change.”
Clitheroe referred to the drink driving and skin cancer campaigns launched a number of decades ago, saying significant changes in attitude with regards to financial literacy would be evident in 20 or 30 years.
According to Clitheroe, the industry has an important role to play in investor education. However, Gillham said unbiased financial education needed to be provided by an independent agency.
“What the industry will teach you is what they want you to know, and that’s what I find is the case,” Gillham said.
