Asking a question at an AGM is often a good way to get access to the Board and force them to engage on a key issue. This approach worked well with the FCA, where I submitted three questions and one of which, on financial education, was answered in the live part of the meeting. Page 18 of the written record of the meeting records that I asked FCA Chair Charles Randell:
Will the FCA support greater financial education in schools and in the wider world, in the UK, so that individuals can learn better about the benefits of investing in shares, funds, and investment trusts? Will the FCA endorse and promote the ShareSoc investment basics course?
So that’s the question from Cliff. The second question, which is from Neelam Sian, is can the FCA share any information in relation to whether there are, or should be plans for working with the Education Ministry to include a financial inclusion course subject within schools to ensure the next generation are educated on basic finance, like how taxes work, to prepare for real life. So two questions about financial education for you, Nikhil.
Nikhil Rathi:
Thank you, Charles. And thank you to Cliff and Neelam for those great questions. I mean, clearly a number of the issues that we are dealing with in the consumer space at the moment, some of the sources of the problems we are dealing with are insufficiently strong consumer education, insufficient understanding of risk. And that’s why I think the agenda that you’re both describing is a really important one for us to be engaged in.
We don’t have a formal consumer education mandate, obviously that’s for the government, through the education department, and then the Money and Pensions Service as well has been set up to support education of consumers. But where we can, we do seek to contribute. So we participate in what’s called a liberate to educate program, which partners with various agencies and charities to make sure that consumer education is at the forefront of their thinking and work. Cliff, your specific question, we don’t tend to support specific products and push them out into schools, but always happy to learn about the particular course that you are describing.
You’ll see that this isn’t just an issue for schools. One of the pieces of research we published earlier this year also related to the kind of rapid rise in 18 to 24 year olds participating in high-risk investments. In that case, particularly cryptocurrencies without necessarily understanding the risks and understanding the scale of loss they might face of the money that they are putting at risk there. So this is also a question I’d say of building up that capacity in higher education and in universities too, so that there is a good understanding of risks before people invest and commit their money. Thank you.
Charles Randell:
Yeah. And thanks very much for the questions. And Cliff, obviously I’d be very happy to, and we met recently, but I’d be very happy to meet again and hear more about your Investment Basics course. So if I can just add sort of one thought from my perspective, and that is the nature of this issue is changing over time because we’ve moved from a world in which a lot of investment was heavily intermediated and various types of investment were not accessible to ordinary consumers to a world in which with one click, investors, ordinary consumers can make what turns out to be a catastrophic decision.
Now, yes, I would love to see financial education and financial literacy at a much higher level than it is currently, but I’m also conscious of the need to do something today that changes the world today. And that’s all about giving investors the best possible information in the moment, in the moment of decision.
And that’s one of the reasons that we are working with the tech giant, the search firms, and social media platforms to have a dialogue about the support that they can give at the point when some of these catastrophic decisions to get involved with scams or very, very high-risk investments are taken. So we need an approach that looks to the long term in financial education, which is largely for the government and for other agencies such as the money and pension service. But we also need to think how we as a regulator can support consumers in the moment.
And that’s an important part of our consumer investment strategy, which we recently announced.
I have now followed up by email and asked to meet FCA Chair Charles Randell to discuss the issues face to face or via Zoom/Teams.
The full transcript can be read here https://www.fca.org.uk/publication/transcripts/transcript-apm-2021.pdf
Cliff Weight, Director, ShareSoc
I submitted 3 questions. I cannot see on the FCA site a list of questions and answers to those not answered live (which the FRC says is best practice for AGMs.). I have submitted this query to the FCA:
Where is the link to all the questions submitted. Were written answers given to those questions not answered live? Please can we have transparency?