Regulators Order $3 Million Financial Literacy Funding From UBS and National Australia Bank

The financial literacy industry is humming over news that the Australian Securities and Investments Commission (ASIC) has required UBS and National Australia Bank (NAB) to commit $1 million and $2 million, respectively, to financial education initiatives throughout Australia after ASIC found both financial giants running afoul of regulations.  While the financial literacy funding pledges by UBS and NAB are seen widely as a punishment for both firms for regulatory misconduct, financial education enthusiasts believe that this type of “penalty” can have a major positive impact for individuals and families who benefit from the financial literacy programs that result from such sanctions.

After extensive investigations into actions by both UBS and NAB, the ASIC found that UBS and NAB engaged in potential market misconduct.  Neither company is foreign to financial literacy, as both have included financial education in corporate responsibility strategies and programming for a long time.  Similarly, ASIC has long held that financial literacy and inclusion are major hallmarks to ensuring that the populace is more empowered in making better informed decisions with respect to their financial lives.

ASIC also has promulgated a broader national strategy on financial literacy in Australia, which is based in part on its research report, Financial Literacy and Behavioural Change.  ASIC’s 2011 National Financial Literacy Strategy underscored that the factors involved with enhancing financial literacy are complex and that making real and lasting change requires a long-term approach.

In more recent months, ASIC has been coordinating a review of the strategy to detect important issues that will help in modifying the strategy for the 2014-2017 period.  The updated strategy is expected to be published during the first quarter of this year.  Many also anticipate that ASIC will continue to require wrongdoing financial firms to pledge greater funding for financial literacy, which should bode very well for the continued growth of the financial literacy space going forward.