Tuesday, Mar 05, 2019

Financial Planning Standards Board Provides Feedback on OECD Financial Literacy and Education Recommendations

DENVER, CO – 05 March 2019 – Financial Planning Standards­ Board Ltd. (FPSB), owner of the international CERTIFIED FINANCIAL PLANNER certification program outside of the United States, provided comment on behalf of the global financial planning community to the OECD International Network on Financial Education (INFE) on its draft Recommendation on Financial Literacy and Education. OECD-INFE’s recommendations call for comprehensive national strategies to guide the development, implementation and evaluation of financial education programs and policies, and align efforts by governments, public authorities and relevant stakeholders to enhance consumer financial wellbeing and support financial stability.

FPSB’s response, which was well received by OECD-INFE, was made through the rubric of financial planning, a client-centric professional advice process that can help (re)build trust and restore the public’s confidence in their own financial decision-making, in financial markets and in financial advisors. Drawing in part on the findings of its 2015 and 2017 global research studies on consumers and senior investors, FPSB supported the OECD’s approach to financial literacy and education, while proposing the OECD recommendation acknowledge: that financial literacy by itself does not guarantee financial wellbeing; the benefits of default options and guided decisions; the importance of providing financial education in the context of life and financial goals; and the importance of promoting access to competent and ethical financial planning professionals as a complement to financial literacy.

In its response, FPSB suggested that the OECD’s definition of “Financial Literacy” might be overstated. While FPSB agreed that Financial Literacy involves “a combination of financial awareness, knowledge, skills, attitude and behaviors necessary to make sound financial decisions…,” FPSB proposed that other factors also contribute to a person’s success (or lack of success) in achieving financial wellbeing, including personal circumstances, behavioral biases and working with a competent and ethical financial planning professional.

Additionally, when it comes to complex products and educating vulnerable/underserved populations—including youth, women and older generations—FPSB suggested that national financial literacy strategies provide education in the context of life and financial goals, and incorporate guidance from competent and ethical financial planning professionals held to a client first duty of care as a complement to financial education.

“As part of its commitment to benefit the public and foster a global profession of financial planning, the FPSB network is active in various national and global financial education and capability programs, including World Financial Planning Day in partnership with IOSCO,” said Noel Maye, CEO of FPSB. “FPSB welcomes the opportunity to collaborate with OECD-INFE and those leading national strategies for financial literacy to support consumer financial wellbeing.”

FPSB’s complete response to OECD-INFE is available here.

About FPSB

FPSB manages, develops and operates certification, education and related programs for financial planning organizations to benefit the global community by establishing, upholding and promoting worldwide professional standards in financial planning. FPSB demonstrates its commitment to excellence with the marks of professional distinction – CFP, CERTIFIED FINANCIAL PLANNER and CFP Logo mark – which it owns outside the United States. The FPSB global network consists of organizations in the following 26 territories: Australia, Austria, Brazil, Canada, Chinese Taipei, Colombia, France, Germany, Hong Kong, India, Indonesia, Ireland, Israel, Japan, Malaysia, New Zealand, the Netherlands, the People’s Republic of China, the Republic of Korea, Singapore, South Africa, Switzerland, Thailand, Turkey, the United Kingdom and the United States. At the end of 2018, there were 181,360 CFP professionals worldwide. For more, visit fpsb.org.

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