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Glovsky hopes to promote early financial education from perch on White House council

Mar 28, 2014 @ 12:59 pm

By Mark Schoeff Jr.

financial literacy, robert glovsky, white house, education
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Robert Glovsky

Robert Glovsky wants to add another topic to the primary and secondary education staples of reading, writing and arithmetic: financial literacy.

He will have a chance to promote that idea as a member of the President's Advisory Council on Financial Capability for Young Americans.

Mr. Glovsky was appointed this month to the panel, which includes the secretaries of Treasury and Education, the director of the Consumer Financial Protection Bureau and 22 non-government members. It met for the first time on March 10.

Among other non-governmental members are John W. Rogers Jr., chairman, CEO and chief investment officer, Ariel Investments; Theodore Beck, president and CEO, National Endowment for Financial Education; Anna Maria Chavez, CEO, Girl Scouts of the USA; Ted Gonder, CEO, Moneythink; Charles Scharf, CEO, Visa Inc.; and Richard Ketchum, chairman and CEO of the Financial Industry Regulatory Authority Inc.

"I would personally like to see the country adopt a K-12 curriculum where every child is learning about personal finance from the time they enter school," said Mr. Glovsky, vice chairman of The Colony Group.

Without formal exposure in school, Americans pick up financial skills only if they have them instilled by their parents or seek them out on their own.

The urgent need for better personal finance grounding is evident in high rates of student loan and credit card debt, Mr. Glovsky said.

"We're not doing a very good job as a society with individuals being financially responsible," he said.

(See also: Financial wellness sector offers new route for young advisers.)

The council is another in a series of financial-literacy panels that have been established over the course of two presidential administrations. Its predecessor, the President's Advisory Council on Financial Capability, was tasked with carrying out a financial-literacy agenda in 2010.

In order to advance financial literacy, the important thing is to follow through on ideas that already exist, Mr. Glovsky said.

"There's a lot of good educational material out there," he said. "The real challenge is now to get people to embrace it and act on it."

The attention to the issue at the national level is positive, but progress depends on state legislatures, according to Paul Auslander, director of financial planning at ProVise Management Group. Education policy remains a state and local matter across the country.

As head of the Financial Planning Association of Florida, Mr. Auslander is advocating for a bill in the Florida House that would make a half-credit in financial planning a requirement for graduation from the state's high schools.

"It's going to have to happen at the state level," he said. "If it's not taught in the states, it's not going to happen."

If all Americans had a better handle on finances it would be a boon, rather than a threat, to the financial advice sector, Mr. Glovsky said.

"Educated consumers make the best clients for investment advisers because they value the advice and are able to make rational decisions based on that advice," he said.

Mr. Auslander has been frustrated by people — even those who are wealthy — who seem to lack a grasp of financial principles. He gives the example of a 67-year-old retiree who decided to take out a mortgage to purchase a boat, assuming that his property value would rise to cover the borrowing costs.

With greater financial literacy, "the advice industry could focus more on the things that are really important, like having an adequate amount of money tucked away for retirement, as opposed to figuring out how to pay down a home equity loan you took out to buy a boat," Mr. Auslander said.

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