April is Financial Literacy Month. As a former college admission officer and financial professional, it is especially ironic to me that financial literacy is the theme of the month, because just as families file their income tax returns, those with students seeking college admission must determine which college they can afford. Financial literacy is key for both. Among high schoolers themselves, only 18% are required to take at least a one semester course in personal finance (Source: 2019-2020 Financial Education Report [Next Gen Personal Finance, 2020]).

Recent turmoil in the financial markets following the collapse of Silicon Valley Bank has unnerved the public, and should remind leaders in the financial services industry of our responsibility to do more to promote the financial literacy needed to evaluate investments and financial information. As financial markets become more complex, the ability to accurately interpret information grows more vital than ever. Given the immense financial and intellectual capital that exists in asset management and education, it is time to identify more creative partnerships between the two industries to promote financial literacy.

Financial literacy is critically important in the United States because individuals are largely responsible for ensuring their own financial security. Recent surveys point to the disturbing conclusion that despite continued efforts by the U.S. government, non-profit organizations, and for-profit entities, financial literacy levels among the American population remain low. For example, according to a 2020 Personal Finance Index survey developed by the TIAA Institute and the Global Financial Literacy Excellence Center, only about 20% of U.S. adults demonstrated a relatively high level of financial literacy, and most answered only half the questions (Source: TIAA Institute-GFLEC,2020-P-Fin-Index, April, 2020).

Reforms focused on financial literacy were enacted over a decade ago, when the Dodd-Frank Wall Street Reform and Consumer Protection Act tasked the Consumer Financial Protection Board (CFPB) with financial education as part of its mission. Recent studies point to the need for more progress. In its 2022 annual report, the CFBP cites the Milken Institute’s research that many people remain ill-prepared to engage in sound financial decision-making, and that financial literacy levels vary significantly across demographic groups (Source: Financial Literacy in the United States, Oscar Contreras and Joseph Bendix, 2021, Milken Institute). If recent trends continue as our population becomes more diverse, wealth gaps will only widen. Failing any agreement or national standard for how to teach these critical skills, people are left to educate themselves.

Although access to financial education is greater now than in the 1970s when I first began working with high school students as a college admission counselor, huge gaps remain. Take the state of California, for example, where approximately 50% of the high school population are low-income, underserved students. According to Eloy Ortiz Oakley, the former Chancellor of the California Community College system and now President and CEO of College Futures, a foundation focused on educational equity and socioeconomic advancement in California, it is not only a lack of finances but a lack of financial literacy, which creates a barrier to student success.

It’s a problem of perception that has endured for over 50 years. Even when financial aid is available, families assume they are unqualified, don’t know how to access it, or both, which is the product of general confusion surrounding the money system and how it works. In the investment advisory world, discussions about 529 plans, investment accounts that offer tax benefits when used to pay for education expenses, are commonplace. But, even for affluent families who are more familiar with these services, concerns regarding their heirs and the lack of financial knowledge persist.

In its 2013 report, the CFBP noted that the financial industry spends $17 billion marketing consumer products and services, which equates to about $10 on marketing for every $1 that it spends on financial education. This spending disparity in marketing to consumers versus educating them shows how our priorities are out of line and need to change.

Here are a few thoughts on where to start:

• Within the firms that provide financial products and services to investors, redouble efforts to ensure that educational information is not only provided to customers, but also that feedback is sought regarding the effectiveness of various tools, from shareholder reports to websites to digital tools. FinTech is of particular interest given not only its technological capabilities but also the degree to which consumers increasingly rely on technology for information. This is a test.

• Financial institutions should increase outreach to schools and community organizations to collaborate on financial education. In my experience, these programs also spur interest among the students to pursue careers in financial services, creating a pipeline of future talent sorely needed in the industry.

• On a policy level, states should pass legislation requiring high school students to complete at least a one semester course in financial education. As of November 2022, 17 states had done so.

Finance and education leaders must demonstrate concern with this issue, not only because financial literacy impacts current and future customers and investors, but because narrowing the wealth gap in this country is a shared responsibility that requires improved access to financial education to prepare fellow citizens to make sound financial decisions. As the clock ticks on, it is pivotal to remember that this threat to our nation’s success won’t wait another 50 years.

A published author, Linda Davis Taylor is a financial literacy, wealth and education expert focused on championing women’s economic independence and strength. Linda is an Independent Trustee for Morningstar Funds Trust, and a Director for San Pasqual Fiduciary Trust Company in Los Angeles.