Europe Faces Financial Literacy Crisis: EFAMA Report

A major European report is calling for urgency in thrusting financial literacy to the highest levels of public policy agendas, while beckoning governments and corporations to move forward with significant financial education initiatives to address what it calls a “financial literacy crisis.”

The report, dubbed “Building Blocks for Industry Driven Investor Education Initiatives,” was published by the European Fund and Asset Management Association (EFAMA) and sheds light on the low levels of financial knowledge regarding basic questions asked of consumers. News of the report is spreading quickly, in part due to the expert analysis included from regulators, academics, investors and others who collaborated on research conducted throughout twelve countries.

Financial literacy industry professionals have long promulgated the importance of financial knowledge in making important financial decisions. The lack thereof, they say, results in poor retirement savings, high levels of debt and other challenges experienced by consumers seeking to best manage their personal financial affairs.

Another primary factor contributing to the financial literacy crisis is the lack of education about finance in schools. That, coupled with the fact that financial products have grown in complexity, has caused many individuals and families to become more marginalized in connection with their desire to become empowered with respect to their money management and personal finance decision making.

Among the important topics highlighted in the report are an analysis and description of the need to roll out investor education programs, a list of best practices for use in implementing investor education initiatives, and a report of various investor education initiatives undertaken by EFAMA members.

A full copy of the report can be found here.