Creating financially literate and better engaged Australian consumers is vital if the superannuation market and the wider financial services industry are to truly reach their maximum potential, a leading minister has announced.
Speaking at the inaugural Money Management Retirement Incomes seminar, the Honorable David Bradbury MP, Parliamentary Secretary to the Treasurer, said the increasing prevalence of superannuation has led to more consumer responsibility for retirement investments as well as greater exposure to complex financial products.
However, Bradbury said that while encouraging consumers to be more active in the decision making-process around retirement investments is good practice, many people still struggle to interpret their annual superannuation statements let alone navigate the variety of products on offer.
“Governments and financial service providers devote a significant amount of effort to ensuring that the regulatory settings are well balanced and that the financial products on offer cater for the needs of Australians planning for their retirement. But an important part of making sure that these markets work effectively is having a financially literate, engaged and active Australian consumer,” Bradbury said.
Bradbury added that boosting retirement income requires people to engage in preparing for retirement as soon as they start their working lives. However, he stressed that this demands a greater level of financial literacy among consumers.
“Financial literacy plays a central role in encouraging people to think about the importance of planning for their retirement from a young age, to set goals for their long-term savings and to take an active interest in the investment decisions they make and that are made on their behalf,” he said.
Referring to the Government’s initiatives to improve financial literacy among consumers, Bradbury pointed to the launch of the National Financial Literacy Strategy and the MoneySmart website in March this year. He also added that the Government was providing $10 million to the Australian Securities and Investments Commission to roll out its Helping Our Kids Understand Finances program, which will train 6,000 teachers and develop a range of resources to integrate financial literacy education into the Australian Curriculum.
“By targeting children early in their lives, we can build awareness of the concepts of budgeting and saving and strengthen their ability to deal with more complicated financial product,” Bradbury said.
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