views on financial education : why? what? how?€¦ · why? what? how? emma dawson, copperfield...
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Views on Financial Education :Why? What? How?
www.globalequity.org
Emma Dawson, Copperfield Communication LLPVéronique Japp, BNP Paribas Securities Services19 June 2008
G Smith
France
Germany
Greece
Ireland
Italy
Portugal
Spain
Holland
Austria
Czech Republic
National Austrian Insurance Association orAssociations & Consumer Protection Agencies
« Financial Driver ’s Licence »
« Get to know your money » National Ministry of Finance National FinEd
Strategy Fall07 & Students Programme in 09
Not for profit associations /Government/Private Organisations
« La Finance Pour Tous »
Denmark
Estonia
Financial Education in Europe
Consob Promotore Finanziario « Learn to Invest »
Government Programme : « Money &Pension Panel »
Government/FS Authority Programmes :« Financial Literacy for Small Businesses »,« My Money » (Consumer Protection)
Government & Private Sector Programmes(vey much targeted at childrens & schools)
« Old age provision goes to school »
Government and regulator’s initiative« centiQ »
Consumer guides on Insurance and Pensionproducts (Insurance Supervisory Authority )
Private sector programmes : « Learn tomanage your money » being one of many
Mostly approached as ConsumerProtection matter
« Economy : Knowledge with value »
« It’s your money » (Irish regulator)
• Only common denominator is that governments, where researchhas been conducted, and transnational bodies (OECD, EU) havefound that there was generally a low level of financial capabilityamongst the population
• Two categories of countries :
• Those where historically the state and the employers havehad a providencial role in influencing behavioural economics
• Those where the individuals have been more, or for longer so,in charge of their financial decisions
• First group : a rather extensive range of financial educationinitiatives, in the larger sense, less so in the work place or indifferent forms
• Secong group : a stronger focus on developping efficient,targeted tools with extensive content
Financial Education in Europe
G Smith
• The OECD found only one initiative in the workplacewhich comes from the UK
• Overall finding is that the countries with the highestnumber of initiatives are the UK, Netherlands,Germany, Austria & France
• Primary targets are children & yound adults
Financial Education in Europe
Financial Education in the workplace
Different countries, different needs, different goals
Different tones & languages
Corporate cultures
Political agendas
Top employee reasons for not joiningshare plans…Following a survey of employees at Orange in the UK,the following were highlighted as the main reasons fornot joining share plans:
• Didn’t think they would make any money
• Lack of cash to invest – other priorities for spending
• Misperception of risk levels involved
• Misperception of investment commitment
• Fear element surrounding shares and markets
• Didn’t understand how the schemes worked
Identify the problem
Asked about communications...
The same survey revealed some interesting perceptionsof the employees views on share plan communications
• Info was sent out very close to cut off date so didn’t havetime to make a decision
• Too much information to absorb at the same time
• Directed at people with good financial knowledge
• Too much financial jargon
• Lack of follow on support
• Over-reliance on extensive printed materials
Identify the problem
must be conceived, developed anddelivered within the context of anemployee financial educationprogramme
• Employees can make informeddecisions based on an holistic view oftheir financial situation
• Employers realise the full benefits oftheir investment in share plans
Effective share plan communications
Identify the problem
Communicating in Context
Financial EducationLinking personal financial health with total reward- life stagesand forward planning.
Business EducationLinking personal financial health with overall businessperformance indicated by share price.
Share Plan CommunicationsMessage learning framework:
SourceMessageAudienceChannels
Project Management
Establish the Business Case
The Business Case
Proven, measurable, and widely accepted:
• Increase ROI on benefits: improve employee acquisition,retention and motivation by improving employee understandingof the full range of benefits offered by the company.
• Improve productivity: AXA found 3.8m people take time of workin the UK each year though money worries. Professor Garmanof Virginia Tech estimates the cost of financial worries tobusiness as between $450 and $2,100 per annum.
• Risk management: financial education protects against the riskof legal action being taken by employees on the grounds ofpoorly informed decisions made on their benefits.
• Soft benefits
10 Establish the Business Case
Why is it not happening?
• Fear of straying from education into advice; how do youdifferentiate?
• Companies often don’t have the skill sets in house that arerequired to produce financial education programmes
• Unclear objectives; what is the programme trying to achieve?
• Delivery; who’s job is it to provide the programme?
• Cost/benefit questions
• Scalability – how do you provide equal access to all employees?
• Lack of tangible examples to be considered, reviewed andcompared
11 Identify the barriers
One solution…
• Online
• Interactive
• Fun and engaging
• Multiple media formats
• Monthly issues – drip feedinformation
• Caters for all levels offinancial sophistication
• Content strategy andplanned curriculum ensurefocus on education andavoid advice
Topical content…
•Debt Management•Pensions•Share Plans•Student Loans•Credit Cards•Mortgages•Saving & Investing•Insurance•Retirement Planning•Tax Credits•Performance•Annual Report &Accounts
Content Strategy
…made relevant…
•Graduate•New Joiner•Home Buyer•New Family•Planning for the Future•Pre/retirement•Redundancy•Annual Bonus•Share Planlaunch/maturity•Tax time
Content Strategy
…and engaging.
•Special Report•The Adventures of FinancialED•The Exploratory•Listen In•DIY•Devils in the Detail•FSA Seminar Series•Company bespoke
Content Strategy
Lessons learned
• Specify policy: education vs. advice
• Agree a business case: productivity, benefits, liability
• Establish a baseline: survey and focus groups
• Specify objectives: specify learning points
• Be creative: it can be pretty boring stuff!
• Plan well ahead: establish a curriculum
• Avoid info overload: learning occurs over time