It is impossible to regulate everything, which is why financial education is so important, according to iPac executive director Paul Clitheroe.
Clitheroe has responsibility for the Government’s national strategy for financial literacy, and stated that while there were inroads in improving financial literacy at the school level, Australian adults presented the greatest challenge.
“Where we’re struggling to get behavioural change is with adult Australians,” he said, speaking at the Self-Managed Super Fund Professionals’ Association of Australia conference in Brisbane.
Clitheroe said he was not sure that self-managed super funds (SMSFs) would outperform in the long run, but they presented a good opportunity for choice.
“We need regulation and legislation, but the best way to protect Australians and generate knowledge over generations is for Australians to be in control of their money,” he said. “If you take choice away from people are they ever going to learn?
“We will not be able to protect all Australians for all issues, and I don’t think we should,” he added.
Adults were the biggest challenge when it came to improving financial literacy because that were busy and it was only when significant life events occurred — such as death or divorce — that they really concentrated on their money, said Clitheroe. However, research showed that the one situation where there was behavioural change with money was during one-on-one conversations, which was why advisers played such an important role in his behavioural change program, Clitheroe added.