This presentation by Adele Atkinson was made at the High-level Global Symposium on Financial Education: Promoting Long-term Savings and Investments in Korea which explored policies and good practices for supporting long-term savings and investments through financial education and financial consumer protection. Find out more at http://www.oecd.org/daf/fin/financial-education/globalsymposiumonfinancialeducationforlong-termsavingsandinvestments.htm

1. FINANCIAL EDUCATION FOR LONG-TERM
SAVINGS AND INVESTMENTS
Adele Atkinson, PhD
Financial Education and Consumer Protection Unit
OECD
HIGH-LEVEL GLOBAL FORUM ON FINANCIAL EDUCATION
26-27 FEBRUARY 2014, SEOUL, KOREA

2. • Brief overview of the role of financial education in
general
• High-level recognition of the importance of financial
education for long-term savings and investments
(LTSI)
• Ongoing efforts from OECD and its INFE
• Summary of INFE members’ reasons for focusing on
financial education for LTSI
• Conclusion and next steps
Outline

3. “the process by which financial consumers/investors
improve their understanding of financial products and
concepts; and through information, instruction and/or
objective advice develop the skills and confidence
to become more aware of financial risks and
opportunities to make informed choices, to know where
to go for help, and take other effective actions to
improve their financial well-being”. (OECD, 2005)
OECD definition of financial education

4. Financial
Consumer
Protection
Financial
Inclusion
Financial consumer empowerment trilogy
G20 (2010) Principles
for Innovative
Financial Inclusion
G20 (2011) High-Level
Principles on Financial
Consumer Protection
developed by the OECD
OECD/INFE High-
Level Principles on
National Strategies
for
Financial Education
Global recognition of
these 3 components

5. • G20/OECD High-Level Principles
on Long-term Investment
Financing by Institutional
Investors
– 8 Principles addressing
regulatory and institutional
impediments to long term
investment by institutional
investors
– Principle 8 covers financial
education, awareness and
consumer protection
Long-term Investment: G20 Context
5
Image source freedigitalphotos.net KROMKRATHOG

6. 1. Long-term savings (especially
for large, anticipated expenses)
OECD/INFE activity
6
OECD/INFE formed a dedicated expert subgroup in 2012
Image sources: freedigitalphotos.net Vichaya Kiatying-Angsulee and Poulsen Photo
2. Planning for
retirement (including
pensions)
Special focus on the role of
financial education in:

7. • G20 High-level principles on
Financial Consumer
Protection cover responsible
business conduct
• OECD/INFE consultation on
draft guidelines for the
involvement of the private
sector and other stakeholders
in financial education
(including LTSI education)
Creating a responsible private sector
7

8. Many overlapping factors
(some are country-
specific) To encourage the
population to make
or increase savings
and investments
To overcome
natural
psychological
barriers to
long-term
planning
To reinforce trust
in well-regulated
financial service
providers
To overcome low-
levels of financial
literacy
To reduce the
worrying
(excessive?)
reliance on
credit
To help
individuals
assess and
meet long-term
goals
The need for financial education for LTSI

9. • Countries as diverse as
Australia, Denmark, India, Kenya,
Mexico and Portugal are worried
about low levels of saving among
segments of their populations
• In Mexico (49%) and Estonia (27%)
adults expect to rely on financial
support from their children on
retirement
• 69% of Polish adults will not tolerate
investment risks, and 50% of total
household assets in Poland are in
housing
Some examples of the challenges faced
9
Image source: freedigitalphotos.net nongpimmy

10. Align
policies
• Co-ordinate incentive mechanisms, regulation, consumer
protection, inclusion and education initiatives, be
consistent. Provide support and guidance to (would-be)
naïve /inexperienced investors
Target
• Identify those most in need of education and increased
awareness and target them; encourage long-term
planning, increase knowledge of appropriate
products, remind consumers to review their strategies
Tailor
• Seek ways of changing their behaviour and attitudes as well
as increasing their knowledge. Develop appealing education
and tools that address the main issues in a way that is
adapted to the target group.
Effective policies: initial observations

11. Financial education for LTSI: topics
Some ideas:
• Understanding that there are risks – such as
the risk of not having enough money to cover
a large expense, that can be reduced through
long-term planning
• Identifying sources of money to save (by
budgeting better, or cutting out certain
expenses)
• Understanding the risks inherent in
saving/investing and how to manage them
• Knowing how to make an effective strategy
• Knowing how to calculate how much to save
given the products available
• Knowing when and where to seek help

12. When LTSIs are inadequate, financial
education should be part of the
solution.
It complements policies on financial
inclusion and consumer protection
It can increase knowledge and raise
awareness of other initiatives, such as
tax incentives, default
mechanisms, save-more-tomorrow
savings products, or increased deposit
insurance
It empowers consumers to improve
their own future financial wellbeing
Conclusion
Image source: freedigitalphotos.net Master isolated images

13. Review the literature on financial education for LTSI
Survey member countries to identify novel
case-studies and examples of good practice
Draw policy conclusions on effective practices
and gaps in provision
Disseminate findings widely in order to shape
future policy
Moving forward ...

14. Thank you
adele.atkinson@oecd.org
www.financial-education.org