Developing Sophisticated Financial Consumers

1
Developing Sophisticated Financial Consumers

• Karen Murrell
• Senior Research Fellow, Asset Building Program
• Murrell_at_newamerica.net
• National League of Cities Bank on and Beyond
• A Roundtable for City Leaders
• September 10, 2008

2
Session Overview

• The Case for Financial Education
• Financial Education Challenges
• Developing Sophisticated Consumers by Addressing
  Financial Life Stages
• Examples Cities Addressing Financial Life
  Stages

3
The Case for Financial Education

• Complex, Consumer-Driven Financial Marketplace
• Changing Demographics
• Market Innovation
• The Subsequent Impact on Consumers

4
Financial Education Challenges

• Low demand from consumers
• Lack of evidence about best practices and
  effectiveness
• No national infrastructure to coordinate and
  ensure effective practices
• Weak financial education distribution system for
  children and adults

5
Financial Life Stages

• YouthUnder 18, still in school, may have a job
• StudentAttending college/university
• Starting OutEntering the workforce
• BuilderGetting married, starting a family,
  building a career

6
Financial Life Stages

• Starting AgainDivorced, widowed
• RetiredLiving on a fixed income
• Care GiverCaring for an elder

7
Youth
8
Student
9
Starting Out
10
Builder
11
Starting Again
12
Retired
13
Care Giver
14
Examples

• YouthBaby bank accounts/Youth savings accounts
  (San Francisco)
• StudentMatched 529 college savings fund (San
  Antonio)
• Starting OutCoordinated access to benefits and
  services (San Francisco)
• BuilderSaving incentives at tax time (New York)
• Starting AgainAlternative RAL product (San
  Antonio)
• RetiredAssist seniors to avoid predatory and
  wealth stripping services (San Antonio)
• Care GiverFinancial Education Network Directory
  and 311 (New York)

15
Developing Sophisticated Financial Consumers

• Karen Murrell
• Senior Research Fellow, Asset Building Program
• Murrell_at_newamerica.net
• National League of Cities Bank on and Beyond A
  Roundtable for City Leaders
• September 10, 2008