“Many people are intimidated by the subject of investing and need our help. They are often too afraid to ask,” he says.
Kuehne says part of the problem of widespread financial illiteracy is that many people don’t even understand how they are at risk.
Hughes says planning professionals should try to volunteer at high schools and community organizations, and take every opportunity to explain the basics of financial planning to the general public.
And he believes that advisors should provide better background information on the decisions they make when meeting with clients on specific planning issues.
Furthermore, many advisors posit that basic financial education should be a requirement in high school and college.
“I remember taking a high school course in basic budgeting and how to balance a checkbook and a few other things,” says Ronald Rogé, a CFP in Bohemia, N.Y. “Now I don’t think they even have that simple course anymore.”
Rogé says he offered to a teach a free financial planning course in a local high school. “There seemed to be an initial interest, then the interest sputtered out,” he says.
And the interest in needing financial advisors could also sputter out. What is the danger if advisors can’t significantly close the financial information gap that affects so many people at a time when Americans are some $4 trillion short on retirement savings, according to EBRI.
Rogé recently encountered that problem.
“I had someone come in and had done no planning and now wanted to retire in his 50s,” he says. “After talking it over, this person suddenly decided that maybe he should work for one more year and that would solve the problem.”