FSI Submissions – Education and Financial Literacy

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The Financial System Inquiry (the Murray Inquiry) has begun to release the submissions received, many of them address issues surrounding financial education and literacy.

The issue of education and financial literacy has been raised in several submissions to the Financial System Inquiry.

The National Australia Bank recommends the development of a ‘national education programmes for retail investors, retirees and self-managed superannuation funds (SMSFs) on diversification, sequencing and risk/return trade-offs.’

While the Commonwealth Bank of Australia recommends more targeted programs, for schools and for ‘SMSF trustees to ensure they are equipped to meet trustee obligations and can assess the economic viability of a SMSF structure for them.’

Similar views are held by the Superannuation Professionals Association of Australia (SPAA). which believes:

“that the risk of individual SMSF failures can be mitigated through better education which can be achieved by ensuring trustees have access to high quality financial advice, improving financial literacy, ensuring that financial advisors have adequate professional indemnity insurance and introducing a financial product-level compensation scheme.”

The submissions appear consistent with those received by the Cooper Review – that there should be an increase in education available for SMSF trustees, but that this shouldn’t be a requirement of having an SMSF (excluding the Education Direction power of the ATO). However there has been little progress in this regard.

The submissions to the Financial System Inquiry can be found on the inquiry’s’ website.

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