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Adele Atkinson - 2014 Symposium on Financial Education in Korea
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Adele Atkinson - 2014 Symposium on Financial Education in Korea


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This presentation by Adele Atkinson was made at the High-level Global Symposium on Financial Education: Promoting Long-term Savings and Investments in Korea which explored policies and good practices …

This presentation by Adele Atkinson was made at the High-level Global Symposium on Financial Education: Promoting Long-term Savings and Investments in Korea which explored policies and good practices for supporting long-term savings and investments through financial education and financial consumer protection. Find out more at

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  • Principle 8: Financial education, awareness and consumer protection 8.1 An appropriate financial inclusion and consumer protection framework combined with financial regulation should promote long-term investment by institutional investors serving the retail market and to protect stakeholders, policyholders and beneficiaries of institutional investors in relation to such long term investment. 8.2 Tailored financial education and awareness strategies should be put in place to inform potential and actual users of institutional investment vehicles about the benefits of long-term saving and investing, as well as any potential risks and costs. 8.3 Default investment mechanisms for those members who do not exercise choice could be put in place in retirement savings systems. Those mechanisms should be consistent with the members’ objectives, risk preferences and time horizons.
  • To identify target groups use data on financial literacy, financial difficulties, investment levels, complaints etc. These may be young people, women, workers, retirees migrants, windfall recipients, current savers, injured investors.
  • Some attitudes may hamper women’s ability to deal efficiently with financial issues: Women have lower confidence than men in their financial knowledge and skills, especially with complex issue Women less interested in financial issues But some attitudes are likely to be conducive to more prudent behaviour: Women appear to be aware of their lack of financial knowledge Men are more likely to be over-confident in their financial skills Women are more risk-averse than men
  • Both women and men need to be sufficiently financially literate to effectively participate in economic activities and to take appropriate financial decisions for themselves and their families. However, women need to improve their financial literacy even more than men because they typically tend to live longer and earn less than men, therefore being more likely to face financial hardship in old age. In addition, their level of financial knowledge tends to be lower than men’s, suggesting that they may not be up to the challenges they face in achieving their financial well-being
  • Transcript

    • 2. • Brief overview of the role of financial education in general • High-level recognition of the importance of financial education for long-term savings and investments (LTSI) • Ongoing efforts from OECD and its INFE • Summary of INFE members’ reasons for focusing on financial education for LTSI • Conclusion and next steps Outline
    • 3. “the process by which financial consumers/investors improve their understanding of financial products and concepts; and through information, instruction and/or objective advice develop the skills and confidence to become more aware of financial risks and opportunities to make informed choices, to know where to go for help, and take other effective actions to improve their financial well-being”. (OECD, 2005) OECD definition of financial education
    • 4. Financial Consumer Protection Financial Inclusion Financial consumer empowerment trilogy G20 (2010) Principles for Innovative Financial Inclusion G20 (2011) High-Level Principles on Financial Consumer Protection developed by the OECD OECD/INFE High- Level Principles on National Strategies for Financial Education Global recognition of these 3 components
    • 5. • G20/OECD High-Level Principles on Long-term Investment Financing by Institutional Investors – 8 Principles addressing regulatory and institutional impediments to long term investment by institutional investors – Principle 8 covers financial education, awareness and consumer protection Long-term Investment: G20 Context 5 Image source KROMKRATHOG
    • 6. 1. Long-term savings (especially for large, anticipated expenses) OECD/INFE activity 6 OECD/INFE formed a dedicated expert subgroup in 2012 Image sources: Vichaya Kiatying-Angsulee and Poulsen Photo 2. Planning for retirement (including pensions) Special focus on the role of financial education in:
    • 7. • G20 High-level principles on Financial Consumer Protection cover responsible business conduct • OECD/INFE consultation on draft guidelines for the involvement of the private sector and other stakeholders in financial education (including LTSI education) Creating a responsible private sector 7
    • 8. Many overlapping factors (some are country- specific) To encourage the population to make or increase savings and investments To overcome natural psychological barriers to long-term planning To reinforce trust in well-regulated financial service providers To overcome low- levels of financial literacy To reduce the worrying (excessive?) reliance on credit To help individuals assess and meet long-term goals The need for financial education for LTSI
    • 9. • Countries as diverse as Australia, Denmark, India, Kenya, Mexico and Portugal are worried about low levels of saving among segments of their populations • In Mexico (49%) and Estonia (27%) adults expect to rely on financial support from their children on retirement • 69% of Polish adults will not tolerate investment risks, and 50% of total household assets in Poland are in housing Some examples of the challenges faced 9 Image source: nongpimmy
    • 10. Align policies • Co-ordinate incentive mechanisms, regulation, consumer protection, inclusion and education initiatives, be consistent. Provide support and guidance to (would-be) naïve /inexperienced investors Target • Identify those most in need of education and increased awareness and target them; encourage long-term planning, increase knowledge of appropriate products, remind consumers to review their strategies Tailor • Seek ways of changing their behaviour and attitudes as well as increasing their knowledge. Develop appealing education and tools that address the main issues in a way that is adapted to the target group. Effective policies: initial observations
    • 11. Financial education for LTSI: topics Some ideas: • Understanding that there are risks – such as the risk of not having enough money to cover a large expense, that can be reduced through long-term planning • Identifying sources of money to save (by budgeting better, or cutting out certain expenses) • Understanding the risks inherent in saving/investing and how to manage them • Knowing how to make an effective strategy • Knowing how to calculate how much to save given the products available • Knowing when and where to seek help
    • 12. When LTSIs are inadequate, financial education should be part of the solution. It complements policies on financial inclusion and consumer protection It can increase knowledge and raise awareness of other initiatives, such as tax incentives, default mechanisms, save-more-tomorrow savings products, or increased deposit insurance It empowers consumers to improve their own future financial wellbeing Conclusion Image source: Master isolated images
    • 13. Review the literature on financial education for LTSI Survey member countries to identify novel case-studies and examples of good practice Draw policy conclusions on effective practices and gaps in provision Disseminate findings widely in order to shape future policy Moving forward ...
    • 14. Thank you 