Closing the financial literacy gap:

Turning passion into action

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Closing the financial literacy gap: Turning passion into action

By IN Research and BNY Mellon Pershing — December 19, 2018

The following is an excerpt from a new research brief, “Closing the financial literacy gap” co-developed by InvestmentNews and BNY Mellon Pershing. The report focuses on how advisers can play a key role in improving financial literacy and education levels. To download the full report, which contains exclusive research, action steps and resources, please click here.

For adviser volunteers: ways to get involved

Financial literacy levels are a major problem:
of advisers surveyed strongly agreed with the statement, “Financial literacy is an issue in our country.”
Just 41% of advisers surveyed are currently involved in an initiative related to improving financial literacy.

The nation's financial literacy gap is so broad and so far-reaching that advisers can make a contribution in many ways. In fact, the need is so great that the process of deciding how to help itself can be confusing. Since a good first step in volunteering is to determine the age group with which an adviser would most like to work, this guide is structured so that advisers can find information and resources based on the age of those an adviser may wish to help. The guide also provides examples of how advisers have helped children, teens and adults become more financially literate.

Below, using input from hundreds of industry volunteers based on their suggestions and experiences, is a high-level overview of how an adviser can get involved in a financial literacy effort that is personally satisfying.

for young children

Join an existing elementary school program

Since creating a financial literacy program and integrating it into an elementary school can be so difficult in this era of core curriculum mandates, many advisers suggest joining an existing and proven program rather than starting a new one. Many successful programs are eager for new volunteers.

Work through a local library

Public libraries are an often-ignored, but vital, component of our educational infrastructure. What's more, libraries tend to be more open to new ideas and community involvement in programming than schools and often are very receptive to educational efforts aimed at children and other segments of the population that may be underserved.

For teenagers/high school students

Take part in a “Career Day”

Find out when local high schools conduct such an event to introduce high school students to possible careers—or suggest that such an event be held—and participate to introduce students to the idea of financial advice as a career as well as discuss the importance and content of personal finance.

Teach a financial literacy course

What are the types of financial literacy initiatives advisers are involved in? Pro bono tops the list:
Providing pro bono services
Promoting financial literacy content (via website, social media, etc.)
Teaching/Volunteering at a high school/community college
Teaching/Volunteering at a local organization (library, community center, etc.)
Partnering with a nonprofit organization
Hosting financial literacy workshops/events at my firm (e.g., financial wellness day)

Use one of the many financial literacy courses designed by educational groups, or design your own, and offer to teach a short course in a high school.

Hold a one-day “Reality Fair”

Work with a school to hold an event for high school seniors that focuses on the real-world aspects of living as an adult. Specifically, the school would assign each student a fictitious job with a defined salary, after which the student would develop a plan on how to live on that salary. Topics to be covered would include budget-building, interest rates, credit, savings, compound interest, credit scores and the need for retirement planning. Advisers can become involved by teaching some of the material or working with teachers to present the material.

For college students

Conduct two “Intro Day” events

Follow the example of the University of South Florida's College of Business, and encourage a local college that offers a financial planning program to hold two pizza-fueled events when incoming freshman arrive on campus: the first for all students and their parents, and the second smaller event for 50 or 60 students that, effectively, is a mini course in personal finance. The first event at USF brings together students, their parents, and the faculty and administration of the financial planning program, which often leads to parents seeking out a financial planner. The second features a financial adviser who discusses their daily work and how they help recent college graduates, the newly married and those planning for retirement.

Offer to be a pro bono adviser

Contact the alumni office of the college from which you graduated and offer to serve as a pro bono adviser to students who need financial advice regarding student loans, car leasing, credit, insurance, saving and job benefits. Advisers who were members of a fraternity or sorority at college could offer similar pro bono services to current fraternity or sorority members.

Create paid internships for peer-to-peer literacy counselors

Since peer-to-peer learning often is better received than lectures from older experts, consider creating a paid internship program for interested local college students that would teach them how to become financial literacy trainers for their classmates.

Offer to include a financial literacy component in wellness programs. Many campuses offer wellness programs that promote physical and mental well-being. Contact a local college that offers such a program, and volunteer to teach a financial wellness component that would cover the basics of saving, spending, credit and investing.

For adults

Consider an “add-on” program

Whether their favorite program is aimed at young children, teens or collegians, many adviser volunteers note one common response from attendees and program administrators alike: “Wouldn't it be great if this program were made available to parents?”

To meet what seems to be such a compelling demand, consider creating a companion program for parents in addition to whatever program is being presented to their children.

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