Blackboard’s not blank, Mr. G

Federal Reserve Chairman Alan Greenspan can move the world economy just by butchering a sentence.

But the Fed chairman’s campaign to improve the “financial literacy” of America’s youth may prove to be far more daunting

During a speech last week, Mr. Greenspan voiced concerns raised in a new study that high-school seniors know even less about credit cards, insurance and other personal-finance basics than their counterparts did five years ago.

But what Mr. Greenspan may not realize is that a growing number of advisers and financial services companies are stepping into the breach.

Working mostly through joint programs with appreciative school districts, they are providing personal-finance education that America’s school kids obviously not only need but also seem to appreciate.

Take Robert Deitrick, for example.

The senior financial planner for Lincoln Financial Group in Columbus, Ohio, helped develop a personal-finance curriculum for DeSales High School that has become a daily, semester-long elective class.

Mr. Deitrick and a teacher at the 1,000-student Catholic school adapted material provided by The Jump$tart Coalition for Personal Financial Literacy, a Washington not-for-profit association that has assumed a leadership role to educate young people in pecuniary matters.

Since 1999, Mr. Deitrick has been helping out by spending six to eight hours in the classroom each month guiding the kids through a variety of topics.

Annual enrollment has surged to 175 kids, from 40, making it one of the school’s most popular electives. Next school year, DeSales will offer an advanced personal-finance class as well. Several other local schools will be adding a similar class in the fall.

Earlier this month, Mr. Deitrick took four students to Toronto to film a segment about currency exchange rates for a personal-finance TV-show pilot, which will be aired locally by the Public Broadcasting System station.

Mr. Deitrick is hoping to get a commitment to a TV series from regional or national syndicators.

“Obviously this is a great opportunity for visibility for a financial adviser, but the kids are getting to take a class that is much unlike any in the area,” says Jonathan Fox, director of the certified financial planning education program at Ohio State University, and an adviser to Jump$tart.

Psychology of spending

William Taylor also has accepted the challenge of boosting the financial acumen of teens.

Clients of Carter Financial Management in Dallas, where Mr. Taylor is an adviser, told him they wanted to come up with a way to help their children learn more about financial management.

They were concerned, not so much about investment information, but rather about the psychology of spending.

“If you go blow everything, at some point in time you’re not going to have anything,” Mr. Taylor says. “That’s where the idea came from.”

So Mr. Taylor spearheaded Carter Financial’s efforts to create a one-day Emerging Investor’s Seminar last June, adapting curriculum materials provided by the National Endowment for Financial Education, a not-for-profit group.

Twenty-five teenagers, mainly children of clients, attended the Dallas event, which was promoted heavily in advance by a national soap-opera star who is a Carter client. The event generated much local publicity, and this June, Carter will reprise it.

One big improvement over last year, Mr. Taylor says, will be an effort to direct the appropriate level of teaching to kids with varying financial sophistication.

“I learned last year that some kids don’t even have a clue what compound interest is. Other kids may have started mowing lawns when they were 14 and already had real assets, and want to know more about mutual funds and other asset classes,” Mr. Taylor says.

Mr. Taylor and others acknowledge that for all their efforts to boost children’s understanding of financial matters, advisers walk a bit of a fine line between education and self-promotion.

“It’s not meant as a marketing tool for Carter Financial,” he says.

Nevertheless, he adds, “it builds tremendous good will. Clients are saying, `That is exactly what we’ve been needing.’ They may have great relationships with their kids, but a lot of times the people closest to them aren’t the ones kids are listening to.”

TIAA-Cref urges advisers who sell its products to work with parents and their children to increase the offspring’s financial knowledge.

“Advisers stand to deepen client relationships simply by recognizing the difficulty and importance of teaching teens about finances and by providing parents with support,” says Madeleine d’Ambrosio, executive director of the TIAA-Cref Institute in New York.

“Parents benefit because they receive an unanticipated and important service from their advisers while at the same time becoming more effective role models and teachers,” she says.

Still, the overall efforts of planners and advisers to help battle teen-agers’ financial illiteracy remain paltry, asserts financial adviser and author Ric Edelman, chairman of Edelman Financial Services Inc. in Fairfax, Va., and emcee of Jump$tart’s annual dinner in Washington.

“There’s no organizational thrust,” he says. “It’s a huge missed opportunity.”