PERSONAL FINANCE: Finance Industry Demand for School Money Classes
Personal, William Kay, The Independent (London, England)
Gordon Brown, the Chancellor, must be hugging himself with glee. Just as the pittance being spent on financial education was threatening to become a political embarrassment, a leading figure in the fund management industry has publicly declared it should encourage and pay for better education out of sheer self-interest.
Wolfgang Mansfeld, president of the Federation Europeenes des Fonds et Societes d'Investissement, the Europe-wide body representing fund managers, said this week: "Investor education and the regulation of intermediaries has to become a bigger concern for fund managers."
In case there was any misunderstanding about Mr Mansfeld's motives, he explained. "The fund management industry should not hesitate to help investors because, in the final resort, fund managers will be blamed if things go wrong. Investors rarely blame themselves."
Fear of blame is a wonderful incentive to get things done. It beats altruism any day. That is why I think Mr Mansfeld's musings offer the best chance financial education could have.
So far the efforts have been far too diffuse to be effective. Both the UK government and the financial services industry have paid lip service to the excellent Personal Finance Education Group, but have kept it so starved of funds that it has been able to perform no more than a peripheral role.
Banks such as NatWest and Barclays have undertaken valuable initiatives to send their own people into classrooms to put across basic messages. But these have not been co-ordinated with a wider programme for teaching finance in schools.
For a long time there was resistance among teachers, but there are signs this is becoming less of an obstacle. And the launch of a personal finance GCSE should stimulate more interest and prompt a more organised approach. The Financial Services Authority has a statutory obligation to promote public understanding of the financial system, but it allocates a tiny proportion of its budget to this vital activity.
Now it has finally dawned on someone, in this case Mr Mansfeld, that Government happy-go-lucky efforts to transfer responsibility for retirement provision from the state to the individual requires individuals to know their way around the financial maze. …