Consumers' understanding of financial information
A presentation by Professor Berna Collier, ASIC Commissioner, at the launch of Australian Financial Alert, Sydney, 19 April 2004
Good evening everybody.
Firstly, I'd like to offer my congratulations to Jenny and her team on the launch of Australian Financial Alert.
Tonight, I've been asked to talk to you about consumers' understanding of financial information, focusing on ASIC's work in relation to financial literacy and disclosure under FSRA. This is a very appropriate topic, given that we are here to mark the launch of this new magazine, which provides consumers with another important source of information about financial products and services.
'Financial literacy' is all about people's capacity to make informed judgements and to take effective decisions about the use and management of money. In other words, it's about making the right choices with money and avoiding expensive mistakes. This is a vital skill in today's world of increasingly complex financial decisions, characterised by such things as easy access to credit, a bewildering array of savings and investment products and compulsory superannuation. At a national level, you will all be aware that savings, superannuation and retirement planning have become important strategic issues for the country as a whole.
In March last year, the ANZ bank launched the results of the first national survey of adult financial literacy in Australia. The survey, which was conducted by Roy Morgan Research, shows that there are strong correlations between those with the lowest levels of financial literacy and people with low levels of education; unemployed or unskilled workers; people on low incomes; and 18-24 year olds and the over-70s.