Financial Education and Marketing:

Keeping the two apart? Lyndwill Clarke

Head: Consumer EducationFinancial Services Board - South Africa

CONFERENCE ON FINANCIAL EDUCATION

Prague, CZECH REPUBLIC 16 -17 May 2013

Definitions

Financial education:

the process by which financial consumers/investors improve their understanding of financial products, concepts and risks and, through information, instruction and/or objective advice, develop the skills and confidence to become more aware of financial risks and opportunities, to make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being.

OECD

Marketing:

the action or business of promoting and selling products or services, including market research and advertising.

Oxford dictionary

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Why are the lines blurred?

• Financial institutions not serious about CFE

• Cost saving

• Lack of capability

• Opportunity

“There is a ‘halo effect’ surrounding education programs, which you can use to strengthen your brand and attract new business throughout the community.”

Morgan Vandagriff, Co-Founder Banzai financial literacy tool

311 years of consumer financial education in South Africa

Why do institutions do Financial Education?

• Is it because consumers are asking for help?

• Or is it because financial institutions think people need it and they want to

make a difference?

• Are you going to build trust?

• Glean some positive PR?

• Or is it to bring in new business?

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How do we keep the two apart?

Insist

Regulation?

Educate the industry

Develop codes of conduct for industry (and service providers?)

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South African perspective (FSB)

We regulate to protect consumer and to provide an financial environment that is safe for consumers to invest in.

SA widely regarding as having the best regulatory markets in the world, but a recent baseline study has shown that this has not led to consumer confidence to invest as a large number are aware of the products but fail to take it up.

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Regulation

Solvency Assessment Management

Treating Customer Fairly (TCF)

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Educate the Industry

Regulatory Examinations

Establish a National Committee of Stakeholders consisting of:

• NGO’s

• Industry associations

• Government departments

• Civil Society and Labour

• Regulators

(Regional example: KZNFLA)

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Codes of conduct for Industry

Financial Sector Codes for BBBEE

• 0.2% of after tax profits for CFE

(0.4% by 2015)

Financial Sector Codes Access Standards for CFE

• Service providers; amount of branding; target group; type of initiatives

(awareness, etc.); Impact, monitoring and evaluation; funding

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More questions than answers

Should we allow integration?

• How to monitor

• How to protect consumer rights (shopping around)

• Legal implications and resources

Point of sale education?

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Points to ponder

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As long as you have a system that is

based on the rational that if you are

making money you are thereby making

a contribution to society, financial rogue

practices will continue, unfortunately

sometimes in the guise of financial

education and to the determent of the

consumer.

Mr Lyndwill Clarke

HOD: Consumer Education

Financial Services Board – South Africa

E-mail: Lyndwill.Clarke@fsb.co.za

Tel: (+27) 12 422 2819

Mobile: (+27) 79 881 1805

www.fsb.co.za

1211 years of consumer financial education in South Africa

Thank youContact Details

www.mylifemymoney.co.za