Christine Hornery

Financial planner, Christine Hornery, CFP, director of FMS Group and Association of Financial Advisers (AFA) 2012 Female Excellence in Advice Award winner, has welcomed comments made by Australian Securities and Investments Commission (ASIC) Chairman, Greg Medcraft last week that financial literacy for children is a top priority.

Commenting on a speech[1] made by Mr Medcraft to the Australian Bankers’ Association (ABA), which listed educating the next generation through the formal education system as priority one of ASIC’s 2014–17 National Financial Literacy Strategy, Ms Hornery said it has often been difficult to educate her adult clients, let alone teach them to pass on financial literacy skills to their children.

“By way of example, some people do not seem to understand that credit cards are loans on which they pay very high interest,” she said. “These people feel that the cash available on their credit cards is their own money to spend as they like. If this is any indication of the type of lessons parents are teaching their children, then we have a serious issue coming our way in terms of debt.”

Ms Hornery therefore believes more attention needs to be paid to addressing these basic issues when children are at school. “Despite many well-intentioned attempts, our school system to date does not appear to have significantly addressed the practical financial responsibilities that an individual has throughout his or her lifetime,” she said. “Financial literacy isn’t about the theory, it’s about the practical – the information children will learn that will actually give them the knowledge and resources to make astute decisions around credit cards, car loans, home loans and budgeting.”

In his speech to the ABA, Mr Medcraft said that under ASIC’s MoneySmart Teaching program, more than 10,000 teachers have received face-to-face professional development and over 40,000 copies of teaching resources have been distributed to schools nationally. Under the action plan in the 2014–17 Strategy, he said ASIC’s goal is to train a minimum of 20,000 additional teachers, with the ultimate objective of teaching financial literacy from kindergarten to Year 12, in all 10,000 Australian schools.

Ms Hornery applauded the move, saying, “We need to start teaching our children that by planning and budgeting we can live the lives we want to lead for longer. Learning how to plan for the future is an invaluable skill.”

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[1] Medcraft, G 2014, ‘The 2014–17 National Financial Literacy Strategy: A speech by Greg Medcraft, Chairman, Australian Securities and Investments Commission [to] Australian Bankers’ Association (ABA) Broadening Financial Understanding Conference’ 3 September, viewed 9 September 2014,  http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/National-financial-literacy-strategy-speech-published-3-September-2014.pdf/$file/National-financial-literacy-strategy-speech-published-3-September-2014.pdf

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Mark Rantall

The Financial Planning Association of Australia (FPA) has welcomed the National Financial Literacy Strategy 2014-17, launched last Friday by ASIC.

The FPA is committed to ensuring that consumers have access to the best financial advice. It sees financial literacy as key to this process, allowing consumers to confidently make decisions in terms of finding the right financial planner and acting on their advice.

Mark Rantall, CEO of the FPA, said: “We firmly believe that all Australians have the right to access the best financial advice. We also agree that there is more to be done to ensure that financial literacy is improved across the board. Ultimately, financial literacy is an everyday life skill that allows people to better understand their finances and to appropriately manage their financial outlook. We welcome ASIC’s commitment to helping consumers in this space, with the launch of this Strategy as well as its MoneySmart Week initiative.

“A collective push is needed from industry and businesses, working together to increase financial literacy and to help bring about the right financial outcomes for all Australians.”

According to ASIC, the National Financial Literacy Strategy 2014-17 aims to improve the financial literacy of all Australians. It will do so by providing a national framework that will allow meaningful action from stakeholders including government, business, community and education sectors.

Mr Rantall said the FPA will continue to support consumer-focused initiatives to execute its vision through members to stand with Australians for a better financial future. It will also continue its own direct work in this space, through Financial Planning Week from 25-29 August, to highlight the benefits of a financial plan and trusted advice.

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