Remarks: National Financial Capability Study Release

Richard G. Ketchum

Chairman and Chief Executive Officer

George Washington University School of Business

Washington, DC

July 12, 2016

Thank you, Gerri and Anna, and thanks to everyone for joining us today for the release of the 2015 National Financial Capability Study findings. This study was a tremendous undertaking that could not have happened without the hard work of many people and organizations, including the George Washington University’s Global Financial Literacy Excellence Center. The Center played a large role in this study and continues to do remarkable work to improve financial capability in the U.S. and around the world.

For those of you not familiar with the National Financial Capability Study—or the NFCS as we like to call it—it is the result of great foresight and equally great collaboration. Back in 2008, the FINRA Foundation, the U.S. Treasury, and Dr. Lusardi envisioned a mechanism to benchmark and track financial capability of Americans negotiating an increasingly complex financial world—and the NFCS was born. Today, we have three waves of data spanning six years, well over 80,000 survey responses, and an untold number of insights and learnings from this large-scale and ongoing project.  

Like a proud grandfather, I could go on and on about the success of this project, but I will focus today on the most noteworthy fact: The NFCS has evolved into an invaluable tool for researchers and stakeholders interested in improving the financial capability and financial well-being of Americans.    

Hundreds of scholarly articles have referenced the NFCS, helping advance our understanding of financial capability in America. The media regularly cites NFCS data. For example, statistics from the Study have been reported in a wide range of publications, including Forbes, the Wall Street Journal, U.S. News and World Report, Marie Claire and the Today Show, to name just a few. Government agencies have cited the study in their reports, and the data have been used in congressional testimony, as well. And top-tier researchers from a host of academic institutions and think tanks continue to use the data. Notably, Nobel Laureates George Akerlof and Robert Shiller cited data from the NFCS in their book Phishing for Phools.

I could go on, but it is also important to note that the NFCS, although a product of the Foundation, is the result of a successful collaboration with many indispensable players. The NFCS is a huge undertaking—one that the Foundation could not accomplish without the help of a talented group of stakeholders.

We are very grateful to the team for its insights and assistance. The Treasury Department played a large role in all three waves of the NFCS, and our colleagues at the Consumer Financial Protection Bureau were heavily involved in this wave and the 2012 wave. Had they been around in 2009, I am sure they would have been involved from the start. We were also assisted by our colleagues at the Federal Reserve Board and the Securities and Exchange Commission—and the Department of Defense on the military component, which we will release later this year.  

And, of course, Dr. Lusardi has been with us on this project since the beginning. The project also reflects the input of an untold number of researchers and stakeholders who have provided their time, energy, and knowledge to develop and refine the survey instrument over the years.  

So what have we learned from the 2015 Study? I’ll give you the highlights and let our speakers and panelists fill you in on different aspects of the NFCS that are meaningful to them.  

The good news is that the financial circumstances of Americans have improved over the last several years—driven in large part by an improving economy and job market. For example, the percentage of survey respondents reporting no difficulty in covering their monthly expenses increased from 36 percent to 48 percent. That is a very significant and healthy 12 percentage point improvement.

However, some groups are still struggling, particularly blacks and Hispanics, those without a high school education, and women. Here’s a sobering statistic: About half of respondents with only a high school diploma or no diploma could not come up with $2,000 in an emergency compared to 18 percent for those with a college degree.

Debt continues to be a problem for many Americans. More than one-in-five Americans have unpaid medical debt. Similarly, more than one-in-five Americans with credit cards have been contacted by a debt collection agency in the last year.

In terms of financial literacy, absolute levels are low; only 37 percent of respondents are considered highly financially literate—meaning they could answer four or five basic questions correctly on a five-question financial literacy quiz. And, financial literacy is down slightly since 2009.

The study also found that financial education is not widely available. Only 31 percent of the respondents said they were offered financial education at some point in their lives, and less than half of respondents said their parents or guardians taught them how to manage their finances.

So we have more work to do.  

Beyond our high-level learnings, there is a multitude of insightful statistics that can be pulled from this rich data source. First, the very large size of the NFCS dataset, more than 27,000 respondents in 2015, allows researchers to examine the financial capability of sub-populations that would not be possible with smaller datasets. For example, some of our panelists will be discussing harder-to-research populations like Native Americans and Americans with disabilities.  

Second, the study’s design allows us to report financial capability data at the state level, which can be very valuable for policymakers looking to better understand the level of financial capability in their states.  

Third, the ability to track trends over time and corroborate learnings from the earlier data sets is an incredibly valuable characteristic of the NFCS, and one that becomes more valuable with each wave of the study.  

Last, we truly believe that the data can help us deepen our understanding of financial capability, which is why the FINRA Foundation makes all the datasets and supporting material available to researchers or other stakeholders at

Thank you for your time today and for your dedication to improving financial capability in America.