Recent Research from Raddon®, a Fiserv company, reveals that Americans are generally overconfident in their financial acumen and the vast majority have never attended a financial education program, although many think such a program would be extremely or very valuable. The following is taken from Raddon’s press release.
While nearly half of study respondents (44%) self-report that they are extremely or very financially literate, when asked to take a financial quiz, fewer than half achieved a passing score, and only 6 percent scored an “A” grade of 90% or better. Given these findings, and the fact that 84% of U.S. consumers have not attended a financial literacy program, there is significant opportunity for financial institutions to help grow their customers’ financial knowledge.
In general, financial literacy improves with age and income, as does reported financial confidence. A notable exception in the survey are members of Generation X, who exhibit less confidence in their financial literacy than millennials, perhaps due to their life stage during the dot-com bust of the early 2000s and the 2008 recession. The impact of these events personally and professionally sets them apart from the rest of the study respondents in that they are less likely to be overconfident about their financial knowledge, and their financial goals are more likely aimed at recovery and stability than other generations.
More than half of consumers (51%) feel understanding financial concepts and financial products is required only on a need-to-know basis, or if they are in need of a certain financial product. This means that education efforts should be focused on the most impactful areas, including money management, retirement and investments. Over a third of respondents (38%) said this type of financial literacy program would be extremely or very valuable, with higher numbers among millennials (55%) and major bank customers (47%). Those who said they had attended a financial literacy program scored higher on the Raddon financial quiz, indicating positive impact. In addition, 18% said that such a program would influence their decision to bring more business to the institution hosting the program.