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An educated investor is a better protected consumerbetter protected consumer

Delia RickardSenior Executive

Australian Securities and Investments Commission (ASIC)

The basic argument

Educated investors are better protected consumersEducated investors are better protected consumers

BUT

While investor education is an essential component of investor protection,

it is not sufficient by itself.

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Education

• Things we can teach

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Education

• Things we can’t teach

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Investor environment

• Implications of the GFC

• Complex environment• Complex environment

• Greater need to save & planfor retirement

• Some of the old rules beingquestioned

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Issues that cause problems•Diversification

•Finding trustworthy advice

•Understanding the risk return premium

•Not reading disclosure material

•Not understandingNot understanding the time horizons of different classes of investments.

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Key questions for government regulators doing investor education• How do we position ourselves amongst the myriad of

people providing investor education?people providing investor education?

• What is our value proposition?

• Which investors do we focus on & how do we prioritize them?

• What issues and or products do we focus on?

• How do we engage our audiences?

• How do we reach the confident who don’t know that they don’t know?

• How do we measure our success?

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Brand pyramidPathway

Attract

Engage

Inform

Guide

Lead to action

Trust

Trustworthy

Motivating

AccessibleSimple

Helpful

PracticalTo help consumers and investors

make financial decisions that

Brand essence

Personality

Tone of voice

Vision

When we apply these principles… we lead the reader to…

Engage Stop     and consider the topic under discussion.

Summarise Think   about the content and gain a brief insight into personal implications.

Guide Act  on the information and help we give to consumers and retail investors, to 

make positive changes in their money management.8

Evaluate

make financial decisions that improve their lives, by providing

information, tools and motivation.

Vision

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Break advice into simple doable steps•Know your goals, time frames & risk toleranceframes & risk tolerance

•Understand how investments work (egdifference between debt & equity, what the risks are)

•Develop an investment planplan

•Decide how to invest (managed funds v DIY)

•Implement your plan

•Monitor your investments

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Simple messages

Too good to be true

Don’t put all eggs in one

basketbe true

Deal with respected

licensed entitiesWhat is your

goal? How will you get there?

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Word of mouth

Money doesn’t happen by accident

Increasing retail investor access to complex products

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Having a voice beyond education

• Not knowing that you don’t know something is perhaps the riskiest scenario of all.perhaps the riskiest scenario of all.

• We will have a better understanding than most about when education will and won’t help solve a problem.

• We need to have a voice in current debates around how best to protect retail investors – including debates around product suitability regimes.

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Product specific education

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Getting our messages heard

• Stories makegood lessonsgood lessons

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Tools that personalise information and make decision making easier

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Tools that personalise information and make decision making easier

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Educating about risk

• Investing & advisors

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Education complements regulation

• Create self-regulating institutions

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Outing scams and bad investments

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Working in partnership

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The End. Thank You!

feedback@moneysmart.gov.au

Infoline +61 3 5177 3988

Moneysmartteam

MoneySmartAu

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