Table of Contents
Executive Summary
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- Overview
- The issues
- Most consumers are still neglecting basic financial hygiene
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- Figure 1: Financial habits and behaviors, by generation, March 2018
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- Figure 2: Financial habits and behaviors, by generation, March 2018
- Family is the is the most common source of financial knowledge
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- Figure 3: Sources of personal finance knowledge, ranked, March 2018
- The opportunities
- Financial literacy is not being taught enough, although the future is looking brighter
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- Figure 4: Sources of personal finance knowledge, any rank, March 2018
- Men are more financially confident than women
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- Figure 5: Self-assessed personal finance grade, by gender, March 2018
- What it means
The Market – What You Need to Know
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- Financial literacy is difficult to define
- The US lags behind world leaders in financial literacy, at #14
- Only 5 states received an A in a national financial literacy assessment
Market Factors
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- What is financial literacy?
- The US lags behind world leaders in financial literacy, at #14
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- Figure 6: Most and least financially literate countries, November 2015
- Population by grades and state percentages
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- Figure 7: US high school financial literacy report, percent of public high school population, by grade, 2017
- Median household income
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- Figure 8: Real median household income, by race and Hispanic origin, 1967-2016
- Personal savings rate
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- Figure 9: Personal savings rate percentage, monthly, seasonally adjusted annual rate, January 1980-January 2018
Key Players – What You Need to Know
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- April is Financial Literacy month
- Personal financial management tools
- Ally Bank strives to bring financial literacy to the nation’s youth
What’s Working?
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- Champlain College: case study in financial literacy education
- April is Financial Literacy month
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- Figure 10: Wells Fargo statement insert, July 2017
- Figure 11: Allstate email campaign, April 2018
- Mint
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- Figure 12: Mint email campaign, January 2018
- Robo-advisors and the passive investment revolution
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- Figure 13: Betterment online advertisements, April 2018
- Figure 14: Robo-advisors vs human advisors, November 2016
What’s Struggling?
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- Too many cooks in the kitchen?
- National Endowment for Financial Education
- Financial Literacy and Education Commission
- Understanding the issue – A confusion in terms
- Many consumers are not confident in their retirement savings
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- Figure 15: Confidence in amount saved for retirement, September 2017
What’s Next?
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- Ally Bank’s financial literacy initiatives
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- Figure 16: Ally Bank email campaign, April 2017
- Figure 17: Fifth Third Bank email campaign, July 2017
- MasterCard tries its hand at podcasting
- Umpqua Bank offers BFF – “Best Financial Friend”
- Personal financial management services
- Goldman Sachs – Marcus + Clarity
- Bank of America | Erica
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- Figure 18: Bank of America email, March 2018
- FINN by Chase
The Consumer – What You Need to Know
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- Most consumers rank their financial knowledge as above average
- Men are more confident in personal finance than women
- Consumers learn the most from family and the internet
- Consumers frequently neglect basic financial habits
- Consumer demand notwithstanding, most have no meaningful financial education
Self-assessed Personal Finance Grade
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- Most consumers view their financial knowledge as above average
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- Figure 19: Self-assessed financial grade, March 2018
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- Figure 20: Opinion of current financial situation, October 2017
- Confidence in personal finance rises with age…
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- Figure 21: Self-assessed financial grade, by generation, March 2018
- …and income
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- Figure 22: Self-assessed financial grade, by household income, March 2018
Differences among Gender and Race
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- Men are more confident than women in their financial knowledge
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- Figure 23: Self-assessed personal finance grade, by gender, March 2018
- Men are also more confident in their financial performance
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- Figure 24: Attitude toward financial services (% agree), by gender, March 2018
- Racial divide
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- Figure 25: Self-assessed personal finance grade, by race and ethnicity, March 2018
Sources of Financial Literacy
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- Family is the most-cited source of personal finance knowledge
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- Figure 26: Sources of personal finance knowledge, any rank, March 2018
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- Figure 27: Sources of personal finance knowledge, ranked, March 2018
- Younger consumers are even more reliant on family as a resource
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- Figure 28: Sources of personal finance knowledge, any rank, by generation, March 2018
- The most financially literate consumers look beyond the family
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- Figure 29: Ranking family in the top three sources of personal finance knowledge, by self-assessed financial grade, March 2018
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- Figure 30: Sources of personal finance knowledge, any rank, by self-assessed grades, March 2018
- Most consumers have not received valuable formal financial education…
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- Figure 31: Sources of personal finance knowledge, ranked, March 2018
- …although younger consumers are learning more in school
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- Figure 32: Sources of personal finance knowledge, any rank, March 2018
Personal Finance Behaviors and Attitudes
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- Most consumers do not follow a monthly budget…
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- Figure 33: Financial habits and behaviors, by generation, March 2018
- …and fewer still utilize a personal financial management tool or see an advisor
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- Figure 34: Financial habits and behaviors, by generation, March 2018
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- Figure 35: Mint email campaign, April 2018
- Self-assessed letter grade highly correlated with responsible behavior
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- Figure 36: Financial habits and behaviors, by self-assessed letter grade, March 2018
- The most financially confident consumers have healthier attitudes toward money
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- Figure 37: Attitudes toward personal finance, by self-assessed financial letter grade, March 2018
- Parents are saving for retirement, but struggling more in the present
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- Figure 38: Financial habits and behaviors (select), by parental status, March 2018
- Younger consumers have more uncertainty
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- Figure 39: Attitudes toward personal finance, by generation, March 2018
Interest in Financial Education
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- TURF analysis – Consumers are receptive to seminars and workshops
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- Figure 40: TURF analysis – Interest in financial education opportunities, March 2018
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- Figure 41: Merrill Lynch email campaign, March 2018
- Figure 42: Charles Schwab email campaign, March 2018
- Consumers prefer to talk to a person
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- Figure 43: Preference for talking to bank employee (% agree), by generation, November 2017
Appendix – Data Sources and Abbreviations
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- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – The Market
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- Figure 44: US high school financial literacy report, state breakdown by grade, 2017
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