1 What is financial literacy, and does financial literacy education achieve its objectives? Evidence from banks, government agencies and financial literacy educators in England1Dr. Nirmala Lee PhD MA BA DipTD CAIIB PGCTLHE FCIB FHEASenior Lecturer in Banking and Financial Services, London Metropolitan University London Metropolitan Business School Accounting and Finance Division London City Campus Calcutta House, Old Castle Street London E1 7NT, United Kingdom Tel (O): +44 20 7320 1134 E-mail: [email protected]JEL Classification: D03, D12, D14, D81, D83, G01, G02, G20, H52, A20 Key words: Financial literacy, financial literacy education, financial literacy curricula, Competency based Action Learning (CoBAL), financial decision-making, effectiveness of individual financial performance 1This research was carried out at the Institute of Education University of London over a period of ten years with support and guidance from Professor Karen Evans, Chair in Education (Lifelong Learning) in the Faculty of Policy and Society and Co-Director of the Centre for Excellence in Work-Based Learning for Education Professionals. I acknowledge with thanks the funding support provided by my employer London Metropolitan University for the research. I also acknowledge with thanks the data that was made available to me by Jim Soulsby of the National Institute of Adult Continuing Education (NIACE) in the form of questionnaires administered to financial advisers and financial institutions for the purpose of data collection and analysis and publication. I thank Professor Diana Coben and the National Research and Development Centre for adult literacy and numeracy (NRDC) for giving me the opportunity to collect and analyse and report on the survey of financial literacy educators for the Department for Education and Skills (DfES). Thanks also are due to Gill Hind for informing the research process in the very initial stages as Manager Consumer Education Services at the Financial Services Authority (FSA).
2 Abstract Banks, regulators and governmental funding bodies have expressed concern about the lack of financial literacy and therefore support educational interventions designed to promote financial literacy. However, whilst the extant literature and providers of financial literacy education both extol its desirability, the meaning of financial literacy and what financial literacy educators should provide has escaped a clear analysis and discussion. This paper seeks to understand the concept and scope of financial literacy from the perspectives of banks, regulators and government funding bodies using surveys, observations, interviews and the use of an innovative curriculum synthesis called ‘Competency based Action Learning (CoBAL). The content and delivery of financial literacy education are then explored to assess the extent to which it is consistent with the expectations of banks and government agencies.