The financial services sector must take a more realistic approach when dealing with consumer literacy and understanding, according to Mercer member services and advice leader Jo-Anne Bloch.
“I do think we have to give up this aspiration that 100 per cent of people out there will necessarily ever understand anything financial, but I think we can do a whole lot better,” she told delegates at the Institute of Actuaries financial services forum in Sydney last week.
“The fact is that 50 per cent of a particular research sample done by the ANZ not long ago indicated that they had no idea what 50 per cent was, so I think we have some real issues on that front.”
Bloch said the industry needed to be more realistic in terms of how it was dealing with consumer literacy, particularly in regards to helping people recognise a financial scam.
“The biggest problem is understanding a scam for what it is, understanding when a deal looks too good to be true that it probably is, understanding when you’re getting ripped off, understanding that you can ask questions, understanding that it’s your money and it’s your responsibility,” she said.
“I think that needs to be a styling point for us in terms of literacy and consumer education objectives – prevention-type activities rather than necessarily counterattack a whole population that is trying to understand what 50 per cent actually is.”
While Bloch noted the government’s financial literacy taskforce was doing a good job to introduce a literacy curriculum into Australian schools, she said it would take some time to work its way through the system.
“In the meantime we have a responsibility to help people help themselves,” she said. “I think the other area we need to address is about helping people understand debt.”
