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Australians demanding financial literacy ‘revolution’ for school students

July 14, 2021

Australians demanding financial literacy ‘revolution’ for school students

Thousands of Australians have signed a petition demanding better financial education for Australian students to combat the nation’s declining literacy in the field.

Thousands of Australians have signed a petition demanding better financial education for Australian students to combat the nation’s declining literacy in the field.

More than 115,000 people have signed the petition launched by Barefoot Investor author Scott Pape, which calls for a “financial revolution” within the Australian education system.

The current system, Mr Pape posits, is failing students and leaving many fresh high-school graduates facing a “lifetime of debt”.

Research suggests he’s right. The OECD’s Programme for International Student Assessment (PISA) is run every three years, and found Australia’s financial literacy rates have been declining for the past six years.

Between 2012 and 2018 (when the PISA was last administered) Australian financial literacy dropped 15 points – roughly the equivalent of half a year of schooling.

Further downgrades to education put young Aussies at risk

There is currently no independent financial education strand in the Australian curriculum, instead teachers are required to cover this important subject within existing maths lessons.

Margaret Marshman and Dr Emily Ross – lecturers with the University of the Sunshine Coast – noted that under this current system, teachers are given specific guidance over what they must teach.

One example of this is the guidance provided to Year 10 teachers, which stipulates their students must be able to “connect the compound interest formula to repeated applications of simple interest using appropriate digital technologies” by the end of the year.

Both Ms Marshman and Dr Ross cautioned these specific examples are being removed from the curriculum as part of reforms intended to ‘declutter’ the content used in classes, and this could negatively affect students.

“Systematically teaching financial concepts in a maths course can improve the financial outcomes of more disadvantaged students,” the pair wrote in a recent article for The Conversation.

“But research shows there is a diversity in practising teachers’ ability to identify and interpret opportunities for teaching financial literacy in curriculum. If financial literacy is left as an example, not all teachers will see the same opportunities for teaching it and financial teaching will be haphazard across schools, and classrooms.”

With 38% of Year 7 – 10 teachers not qualified to cover mathematics, Ms Marshman and Dr Ross said it is vital specific finance examples are kept in the curriculum to ensure students graduate with the financial knowledge necessary to navigate their adult lives.

Pandemic highlights need for ongoing education

Emergency measures implemented by governments and central banks around the world as weapons in the fight against the coronavirus, created a fundamental shift in the rules traditionally governing investment markets.

The strain placed on traditional models of economic thinking emphasised the importance of ongoing education and continuous learning among adults – including many professionals who work in the finance sector.

Major Australian bank NAB, for example, set aside $50 million to invest in training for the company’s 34,000 staff.

It’s not only extraordinary circumstances such as a global pandemic which make continuous learning for adults important however. An IDC report from 2019 found professionals who receive ongoing education are more productive than those who do not.

In addition, it has become increasingly easy for anyone to jump online and invest without prior experience. According to a Deutsche Bank survey almost half of U.S. retail investors were new to the markets in 2021-2020. Most are under 34 and have a larger risk appetite than their more experienced counterparts. They are also more willing to use unconventional research methods to find new investment ideas. This is arguably a benefit for new investors, who have greater control and opportunity to invest than previously, but it also makes access to research and education more important than ever.

At Reach Markets, our vision is to empower investors and traders with the education they need to make investment decisions. That’s why we provide our fortnightly webcast series ‘Meet the Fund Manager’ where we invite prominent investment experts to share an overview of market insights, emerging trends and their favourite stocks, followed by an interactive Q&A.

This Friday, Lee IaFraté, Executive Chairman of Armytage Private Limited will be joining us. If you would like to attend this live session, you can book your spot here.

 

This update is being hosted by Reach Markets Pty Ltd (CAR of AFSL 431191) on behalf of Armytage Private Limited. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position. Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.  The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.  Past performance is not a reliable indicator of future performance.

 

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