IDEAL ADVICE

Recommendations

program in 2006, hundreds of thousands of people have received assistance, education, and advice that was previously unavailable to them. The FSA’s next step is to extend this program to reach millions of people across the UK.

An integrated financial education program

As detailed in our last report, “Ideal Fund” , we recommend an integrated and harmonised financial education program across Europe that is required during school and university and optional and need-based during the rest of the investor’s lifespan.The program should be funded by government and the industry. The United States, United Kingdom,Australia, New Zealand, and other countries already have in place well-defined financial literacy programs funded and led by state governments often with support from the industry. In the United States, the National Financial Capability Challenge was put in place in December 2009 by the Treasury Secretary and the Education Secretary in order to promote financial education among high school students across the country.

Provision of financial educational materials by product manufacturers and industry associations

In addition, we recommend that product manufacturers and associations provide general and specific education materials and training to investors. Initiatives to increase the financial literacy also represent a huge opportunity for product manufacturers to get closer to and increase the awareness of their brand among investors. More than ever, now is the time for the industry to tackle the challenge of financial education. As an example, T. Rowe Price has partnered with Walt Disney to establish a virtual board game on its website that educates children and adults on the importance of wise financial planning. In Italy, the theme of the most recent asset management convention was the improvement of financial education.

29

In the United Kingdom, the FSA is providing leadership through the National Strategy for Financial Capability. Since the launch of this

Figure 12

Figure 13

Limited time of the advisor

38

7%

Lack of client nancial education

9%

33

Could you rank the five most important barriers for delivering high quality advice?

How would you assess your level of investment knowledge?

Lack of information available to client

29

Limited time of the client

25

39%

Lack of transparency of products

24

45%

Limited product o ering (only proprietary fund)

23

Regulatory requirements

22

Expert

Intermediary

Lack of training

18

Internal strategy aiming at pushing product

15

Basic

None

Retrocession fees

3

Source: PwC/CACEIS Financial Advisor/Distributor survey 2010

Source: PwC/UCL Investor survey 2009