Financial advisers are willing and able to make a significant contribution to the lives of Australia’s students and their parents. Government should get out of the way.
To quote Mrs Lovejoy, the pious preacher’s wife from The Simpsons, “would somebody please think of the children”.
While the young people of today are arguably more ambitious and commercially-minded than their baby boomer hippie parents or grandparents were at their age, they continue to be denied access to information that would allow them to attain even a basic level of financial literacy.
Personal debt for young people continues to climb, and as overzealous regulation pushes financial advisers towards high-net-worth client bases, high quality advice becomes ever more out of reach for people without deep pockets, including youngsters.
Meanwhile, Australia’s financial advisers have stepped up and are willing to do something about it. A recent ifa straw poll found that nearly 84 per cent of ifa readers would love to volunteer their time to teach school students about their craft and how to live more healthy financial lives.
Considering that students need this information desperately, that advisers are willing to provide it free of charge and that pretty much any decent parent would be happy for them to do so, you would think this might be an easy solution to an important social problem.
In the case of Australia’s financial literacy crisis, we actually have a rare case of what economists call ‘equilibrium’ – supply and demand are in perfect harmony.
But alas, easy solutions are not so easy and common sense is not so common, when politicians and their minions – rather than parents – get to decide these things.
State ministers and bureaucrats determine school curricula in this country, not individual teachers, school principals or parents, even when those schools are privately-owned.
Some of you might be thinking this is a good thing, that these education department folks are likely to be the most qualified to make these decisions. Well maybe when it comes to Shakespearean sonnets or neo-Marxist dance theory, you’d be right.
But I guarantee that on the issues of investment, financial markets and personal fiscal discipline, professional financial advisers are far more qualified to educate others than public officials who can’t get their own spending under control.
And yet, too many advisers – despite their intention of goodwill and volunteerism – face hurdles if they wish to provide students with this important information.
A spokesperson for the Australian Government Department of Education and Training recently told ifa that advisers who wish to volunteer their time should “familiarise themselves with the Australian Curriculum content”.
In other words, ‘forget your years of professional real world experience, if you want to speak to students you better be singing from our approved hymnbook’.
She also said they may wish to look at training to become fully-fledged teachers if they want to get in front of students – another unnecessary layer of bureaucratic nonsense that defeats the purpose of having outside expert presentations.
Responsibility for financial literacy within the government lies with ASIC, hence the corporate regulator’s MoneySmart project and others of this kind. The MoneySmart website hosts the financial adviser register and goes into great detail about how consumers should be cautious when seeking out an adviser, but hardly recommends that people seek advice.
This lukewarm approach to the role advisers should play in the financial literacy process is perhaps unsurprising, given ASIC chairman Greg Medcraft’s longstanding and obvious disdain for the industry.
The great shame is that by blocking advisers from making a contribution to student financial literacy efforts, it helps reinforce negative perceptions of the industry.
If only parents knew that financial advisers were so willing to educate their children free of charge, and that systemic hurdles, rather than lack of will, stood in the way. Perhaps the number of them seeing an adviser may actually rise.
But while advisers are sadly missing out on a great positive PR opportunity, the real victims are the students themselves.
Young Australians deserve greater exposure to the true experts in this field before they rack up the mountains of debt and anxiety.
Instead, they are beholden to state-sponsored ideas penned by apparatchiks and professional teachers, many of whom - while well-meaning - and are not exactly financially literate themselves.
Some advisers have been successful in getting around these hurdles or pushing through, either by way of their own perseverance or occasionally sympathetic school principals or teachers.
Good on them. ifa encourages them to keep going and will continue to shed a light on their efforts.
But it should simply not be this difficult to provide key information to vulnerable people who need it most.
The health of our nation’s financial life depends on them getting it.
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