Financial advisors have the power to help solve the financial illiteracy problem in the U.S., said Andrew Crowell, vice chairman of wealth management and a financial advisor at D.A. Davidson, a national wealth management and financial services firm.

Advisors can work with clients’ children to make sure they are financially educated when they become adults, and they can reach out to people in their communities who are the most likely to need financial education, Crowell said in an interview today. The fact that financial literacy is not a higher priority for adults or in schools is unfortunate because it is a vital life skill, he added.

In a recent D.A. Davidson Financial Literacy Survey of 1,047 adults, the largest group of respondents, 36%, gave themselves a C grade when asked to rate their financial literacy knowledge. The second largest group, 34%, gave themselves a B. Only 4% admitted they would give themselves an F, while 16% gave themselves an A, and 10% gave themselves a D.

“When you consider that people usually rate themselves in surveys as better than they are, the fact that the largest group gave themselves only a C is disturbing,” Crowell said. “For a topic that is as central to our lives as money is, it is astounding it was only a C.”

In addition, 53% of the participants said they could have handled their money better during the pandemic if they had known more about finances. That percentage jumped to 71% for Gen Z, which is usually considered those people born between the late 1990s and the mid-2000s.

“These young people have financial apps, and what amounts to a bank, on their phones, and yet nearly three-fourths said they could have managed their money better if they knew more about finances. That’s dangerous,” Crowell said.

There's not enough financial education in schools, he added. “Finances clearly have been elbowed out of the classroom. For instance, I would like to see math classes have real life problems that involve finances to solve, but they don’t,” he said.

Eighty-eight percent of the survey participants said they feel finances should be taught in schools, with nearly half saying it should be a classroom subject before age 15 and one quarter saying it should be before age 10.

“We seem to recognize we have deficiency in financial literacy, and yet it is not something we teach in most schools. Young people need this knowledge because they have the power of compounding on their side and they need to know how to save early,” Crowell said. “Financial advisors are in a unique position to help their clients’ children.”

Advisors also have the power and skills to reach out to the community. D.A. Davidson started a program three years ago called Moneywise to teach teenagers about finances. D.A. Davidson said in an email, “Closing the financial literacy gap will take time and a focused commitment, but it is essential for the long-term health of our economy and its citizens.” The program was established in partnership with the Metropolitan YMCA of Los Angeles. Financial classes were held in three locations the first year and have expanded to more than 30. Students learn to create detailed budgets and learn about banking, budgeting, paychecks, purchasing a car, saving, investing and the cost of college.

Programs like this are needed most in those areas that normally do not have access to financial education, he said. According to the survey, 61% non-white respondents said a higher level of financial literacy would have helped them manage their finances better during the pandemic, compared to 44% of white respondents who said the same. Similarly, 63% of respondents living in urban locations said they would have benefited from a higher level of financial literacy during the pandemic, compared to only 38% of respondents residing in rural locations

The survey asked participants what financial subject they know the least about and 48% of respondents said investments and investing. Twenty-one percent said they are the weakest on insurance policy and coverage; 16% said debt management and 15% said creating a financial plan.

Asked how financial experts and policy makers should improve the situation, Crowell said, “I see it as sobering but also motivating because we can now explore how to address the problem. If we get out front of this, we can solve it.”