Today, the National Financial Literacy Strategy 2014-2017 was launched by the Australian Securities and Investments Commission (ASIC), Australia’s corporate, markets and financial services regulator.
Good Shepherd Microfinance was invited to contribute to the development of the strategy, sharing our experience of working with large numbers of financially excluded people. We are delighted to see this leading global initiative, led by ASIC, to boost the financial capacity and capability of all people across Australia. It is clear that this strategy and the accompanying action plan, when carried out, will directly enable individuals, their families and communities, to define and then realise their own economic wellbeing and feel valued and in control of their finances and lives.
Financial literacy is a core life skill for participating in modern society. There is compelling evidence that informed consumers that are able to choose and access the right financial advice and products at the right time, are more likely to achieve economic wellbeing, as consumers themselves define it. Key priorities outlined in this strategy aim to increase access and awareness of free, impartial information, tools and resources (such as www.moneysmart.gov.au), and provide quality targeted guidance and support.
The 2014-17 Strategy is built around five strategic priorities:
1. Educate the next generation, particularly through the formal education system
2. Increase the use of free, impartial information, tools and resources
3. Provide quality targeted guidance and support
4. Strengthen co-ordination and effective partnerships
5. Improve research, measurements and evaluation.
There is a clear national economic case for proactive, informed and capable people confidently interacting with financial service providers to better meet their needs. Equally, financial service providers need to complement this strategy and continue to make their advice and products less complex and solely focus on the interest of clients, rather than sales culture-driven behaviours that result in inadequate client outcomes.
ASIC is to be highly commended for this excellent initiative, strongly supported by Good Shepherd Microfinance on behalf of the millions of people our programs have reached.
For more details, the National Financial Literacy Strategy 2014-17 and Action Plan can be found at www.financialliteracy.gov.au
Financial Literacy definition:
According to the strategy, financial literacy is “having the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions, based on personal circumstances, to improve financial wellbeing”. This includes more confidence in managing money and risks, avoiding pitfalls, reaching financial goals, more informed interactions with industry and product providers, and increased confidence engaging with financial products and services.