It all adds up to an empowered financial future
Teaching children in primary school how to budget and stay out of debt would be positive step forward.
Some 30 years ago I had the pleasure and privilege of working with Marie Jennings when, as chairman of the Money Management Council, she campaigned tirelessly for financial education to be a compulsory part of the school curriculum.
We both believed passionately that young people should leave school with a greater understanding of the importance of saving and protection, as well as the benefits, and dangers, of debt.
Since then there have been papers and policy statements galore, but, how much has actually been achieved?
I was therefore heartened to read of a parliamentary report, which recommended a new regime of financial education from primary school age upwards, targeted at promoting positive attitudes towards budgeting and saving.
We have also recently seen initiatives such as the MMR and the introduction of much firmer regulation of consumer credit businesses.
While such measures are driven by good intentions, I do not believe the onus for calculating the affordability of a product or service for a client belongs wholly on the shoulders of advisers, lenders or product providers, which is why financial education has such an important role to play.
Starting financial education earlier should empower the clients of the future by having an understanding of the importance of saving, protection and the avoidance of unmanageable debt.
I believe this will also help to eliminate the feelings of intimidation some experience when trying to manage their finances for the first time, as well as helping to create a culture in which fewer fall under the banner of “vulnerable”.
Consumers who understand the basics of managing their financial situation will also have a greater understanding of the value of services on offer from financial advisers.
Indeed they are likely to arrive at the stage in their life when they choose to work with an adviser earlier and with their personal finances in a much healthier state.
We are all aware of the savings and protection gaps in the country’s economy, and of how dangerous they will be if left unchecked.
Financial advisers are vital to help individuals tackle these issues and I am confident that a greater understanding of financial matters from an early age will be hugely positive for clients, advisers and the entire financial landscape.
Ken Davy is chairman of SimplyBiz Group