Let’s be frank: Clients are often financially ignorant. Advisors devote a lot of time to explaining the most elementary principles. When a client’s family gets involved, that learning curve can get even more complicated; different generations have differing degrees of comfort with money.

Some advisors are working to improve the situation. By contributing to financial literacy programs, they hope to alleviate the knowledge gaps and add value to their clients and their communities. Should you join them? Here’s a look at how different practices are tackling the issue.

The Scope Of The Knowledge Gap
“You would be amazed how much time is spent on the basics of personal finance for even the wealthiest of clients,” said Tom Henske, a financial advisor at The Affluent Insurance Advisor in New York City and founder of Total Cents, a program that teaches parents how to talk to their kids about money.

Henske, author of It Makes Total Cents, said money was a taboo topic for many people when they were growing up. As a result, they never learned to invest or budget wisely. “The reluctance to talk about money in the home has led to some very bad habits,” he said. “Our industry has a chance, maybe even an obligation, to be the difference-maker. For advisors, it’s about future-proofing their practices.”

Misinformation
Andrew Crowell, financial advisor and vice chairman of wealth management at D.A. Davidson & Co. in Los Angeles, agreed. “One alarming concern we have experienced more and more is clients believing they have complete information simply because they’ve listened to a soundbite or a podcast with an ‘expert,’” he said. “They may have only seen a brief news notification, but they believe they’ve read a thorough dissertation on the topic.”

To Crowell, the only thing worse than being ignorant is thinking you’re well-informed when you’re really not. “In a nutshell,” he said, “having access to more information does not equate to having more reliable knowledge.”

Educating Your Clients
How can advisors help set clients straight? “It is important for advisors to educate clients on all wealth management topics as they relate to [clients’] financial situation,” said Ashley Sullivan, a private wealth advisor at LVW Advisors in Pittsford, N.Y.

But beyond that, she said, “weaving educational content, rules of thumb, [and] statistics into every meeting is beneficial. Periodically hosting events that are educational in nature also can be useful for clients.”

In addition, Sullivan has participated in a program called “Money Matters: Make It Count,” a partnership between the Charles Schwab Foundation and the Boys and Girls Clubs of America, to mentor teens and help develop their financial skills.

It Starts With Kids
Educating young people about money seems to be an essential and much needed foundation. In a 2022 survey, the Council for Economic Education found that just 23 states require students to take a course in personal finance. “High-income schools were three times as likely to require enrollment in a personal finance course than their low-income peers,” noted Sullivan.

Kossandra McDuffie, a senior associate at Homrich Berg in Atlanta, concurs. The educational deficit is worse in “underserved communities,” she said. No single solution “will fix the problem,” she added, though spreading awareness that the problem exists is a necessary first step.

The repercussions of early education can be profound. “Providing a base level of financial management knowledge and education in high school is absolutely critical,” said Dan Eck, managing director of group learning for EY Personal Finance, a unit of Ernst & Young, in Columbus, Ohio. “Financial decisions individuals make as young adults have an impact that lasts decades, positively or negatively.”

Programs
EY Personal Finance runs EY Navigate, a service dedicated to providing objective, comprehensive financial education and counseling services to employees of large organizations. It also operates a financial literacy summer camp targeted at the children and grandchildren of clients and employees. “This year’s summer camp offered eight 30-minute Zoom sessions,” said Eck, on topics such as budgeting, banking and building credit.

Financial firm Edward Jones partners with EVERFI, an online-educational consultant, on a program called Financial Fitness. “With a goal of building financial knowledge and confidence, we aim to address financial health by reshaping conversations around money in younger generations,” said Vanessa Okwuraiwe, principal in diversity, equity and inclusion at Edward Jones in St. Louis.

The curriculum includes “brief, interactive modules to help clients build financial knowledge around milestones, from getting a first bank account to preparing for financial caregiving, and everything in between,” said Okwuraiwe. As of August 2022, the program had educated more than 400,000 participants.

Partnering With Community Groups
Other firms partner with community groups. For instance, GYL Financial Synergies in West Hartford, Conn., works with Junior Achievement, a global nonprofit dedicated to preparing the next generation for success.

“[We] visit elementary schools and provide a primer on a variety of financial literacy subjects,” said GYL’s CEO and cofounder, Gerald B. Goldberg. “It is better to expose children to these concepts when they are younger.” The sooner this information is taken onboard, he said, the better the odds they will “avoid bad habits and major financial mistakes.

But even those who aren’t formally involved in education programs can contribute. “Having conversations with clients about how to teach their children to make disciplined, responsible financial decisions can have a major impact on [their] financial literacy,” said Jeff Mattonelli, a financial advisor at Van Leeuwen & Co. in Princeton, N.J.

Outreach
Mattonelli‘s firm also runs an internship program for high school and college students who are interested in finance.

Other practices have the younger generation attend client events and meetings. “[Try] inviting your clients’ children and family members into the financial planning conversation early and often,” suggested Isabel Barrow, director of financial planning at Edelman Financial Engines in Alexandria, Va. “Encourage your clients to share their newsletters, books, webinar links, etc., with their friends and family.”

Edelman also hosts many webinars and radio programs on a variety of financial topics. “If you aren’t hosting webinars [and] seminars, or creating a client newsletter, then that’s a great place to start,” said Barrow.

Taking an active role in educating clients’ children is part of the job for Jon Ekoniak at Bordeaux Wealth Advisors in Menlo Park, Calif. “We offer in-person and webinar training targeted specifically for young adults,” he said. “This core curriculum helps prepare them for their financial future, independent from their parents.”

Topics covered include setting financial goals, budgeting, and cash and debt management. Some of the educational content has been recorded for Loyola Marymount University.

Cast A Wide Recruitment Net
Besides educating young people, some firms focus on expanding access to the profession.

“Becoming a financial advisor has become more and more complicated over the years,” said Paul Chong, head of investments and retirement at CUNA Mutual Group in Madison, Wisc. Obtaining the necessary training and licensing is “hard without support and guidance,” he said, “and that represents a major barrier to entry, especially for young professionals of color.”

CUNA Mutual’s recruitment and retention pipeline includes “training programs such as the Multicultural Financial Services Internship Program,” said Chong, which seeks out diversity.

Henske, of the Total Cents program, stresses that spreading financial literacy is good for an advisor’s brand and reputation. “It is not hard to do, costs little money, and has huge relationship-building benefits,” he said.