July 25, 2021

the challenge of training investors and savers

the challenge of training investors and savers



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«The financial education of the Spaniards is improvable», it states Fernando Tejada, responsible for the Financial Education Plan of the Bank of Spain (BdE), and the data prove it. Less than half of citizens know what compound interest is or know the importance of risk diversification when investing, this is included in the Financial Competences Survey prepared by the BdE and the CNMV that measures the financial knowledge of the population among the 18 and 79 years old.

This ignorance has its consequences. It does not allow a large percentage of citizens to understand the operation, risks and opportunities offered by the financial products they hire and "prevents them from making responsible financial decisions to plan their future," they acknowledge from the Bank of Spain. Also from the OECD, the IMF and the European Commission consider that the financial education of the population is a good tool to guarantee the protection of investors and consumers and to strengthen international financial stability. And more in a financial market increasingly complex and difficult to understand, with new investment products and sophisticated financial business models based on new technologies.

Despite its importance, "financial education is still a pending issue in Spain," admits Beatriz Morilla Piñeiro, head of CSR at the Spanish Banking Association (AEB).

As well Jordi Martínez, director of the Financial Education Program of the European Association of Financial Advising and Planning in Spain (EFPA), recognizes this 'suspense', but believes that «we are improving little by little», since a series of "interesting" initiatives, from the private and public sphere, to promote financial education in all layers of society.


These initiatives include those carried out by the CNMV and the BdE as the Financial Education Plan, whose objective is to contribute to improving the financial culture of citizens, providing them with tools, skills and knowledge to make appropriate financial decisions; the website finanzasparatodos.es and the Financial Education Day, which is celebrated on the first Monday of October, and whose purpose is to make citizens aware of the importance of acquiring the necessary knowledge to be able to manage their personal finances throughout their lives.

This year was celebrated last Monday, and the central act was chaired by the Secretary of State for Economy and Business Support, Ana de la Cueva; the Secretary of State for Education and Professional Training, Alejandro Tiana; the governor of the Bank of Spain, Pablo Hernández de Cos; and the president of the CNMV, Sebastián Albella. All of them, gathered at the headquarters of the CNMV, stressed the need to enhance financial education from the public sphere and the importance of the collaboration of the Administration with the private sector in this field.

In the course of the act, the final of the Financial Knowledge Contest, in which the Holy Trinity College of Plasencia won and runner-up was the San Francisco Javier de Tudela School; and the prizes of the third edition of the Finance for All Award were awarded to the best financial education initiatives carried out in our country. The winners were 'Finances for mortals', for their work in promoting financial education in Spain, and the 'Bases Project' of the Cooperativa de Maestros Melilla, developed at the Enrique Soler School in the autonomous city.

Together with the Administration, financial entities are increasingly committed to promoting this type of activity that reached 1.2 million beneficiaries last year. Among them, the 'Funcas Program for the Stimulation of Financial Education' stands out, promoted by the Foundation of Savings Banks (Funcas) and by CECA.

How to approve?

This set of initiatives will help the Spanish achieve in the medium term to approve this matter, experts say. But, in his opinion, there is still more to be done. Fernando Tejada points out the need to create a "national financial education plan in which all sensitivities are tried and then start working in the education system".

For Beatriz Morilla the solution would have three parts. First, the Administration would have to contribute to sensitize citizens of the importance of having basic financial knowledge to better manage their lives and consume more safely and responsibly. For their part, financial institutions should "advance" in including education processes in their banking applications and in making their products more and more simple and understandable. The third 'leg' of the solution would be for educators to include basic financial concepts in their training plans, from the simplest "how to differentiate between want and need, to something more complex such as the relationship between risk and profitability". Because, in his opinion, "financial education is essential for today's children to become responsible consumers in the future".

Including financial education in the education system is "essential" to overcome this knowledge deficit. This is what Jordi Martínez acknowledges: "While it is true that since few courses there is an elective economics subject in the fourth year of ESO, and that there are some good public-private initiatives, it would be positive that the basic financial concepts will be part of the school curriculum in a universal way ».

Recognizes that there are more and more groups interested in financial education so that administrations "should look at some countries that are more advanced in this area and whose model is able to identify each moment in the life path of people to adapt the contents to impart ».

Also Raquel García Alcubilla, director of Strategy and Institutional Relations of the CNMV, believes that "the key lies in the intensification of the participation of public and private institutions in the promotion of financial education. And it is very important to start from the earliest stages of learning "because" it is a subject that must be studied throughout life ".

For Beatriz Morilla "it is never too early" to introduce concepts of financial education, a subject that "should definitely be part of the school curriculum". As in other European countries such as Denmark, "in which primary school children are trained in this subject through concepts such as the value of coins and banknotes".

A collective benefit

Improving the financial culture of the Spaniards would benefit everyone. The users of financial services would improve the understanding of the products and services that they hire and that best adapt to their needs. «It will help them to make better saving and investment decisions, since they must have at their disposal all the information related to the products they consume », recommends Jordi Martínez However, it considers that they should also be able to have access to a qualified professional, to ask the necessary questions about all the investment options and to "enable them to understand their advantages and risks, before making an investment decision".

Antidote against "fraud"

In addition, the financial culture protects them from fraud, since a better training in finance would have helped to avoid scandals such as preferred shares. This is recognized by Fernando Tejada, for whom this knowledge "improves the ability of citizens to understand financial products and should help to reduce episodes such as those we have experienced in recent years, including that of preferred shares". But, in his opinion, it is also important to keep in mind that financial education "is one more tool and there is work to be done from the point of view of supervision and regulation in which the BdE and the CNMV are involved".

Also for Raquel García Alcubilla, this education is essential, since "it helps to understand financial products and services, their characteristics and their risks". But also, «Fosters attitudes and habits related to saving and the financial responsibility that influences investment decision-making. "

The Administration and the financial entities have already laid the foundations to increase the financial culture of the Spaniards. Now we have to wait for them to consolidate.


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