1. What is the single most neglected area in the field of investor education? How might this area be developed? Bar none, the most neglected area is financial planning -- investing being just one of five primary focus areas. Investment, tax, estate, insurance and retirement planning all need to be discussed and aligned with one’s life/financial goals. It can be developed by changing our mindset/paradigm from “investor/investing” to one of “financial planner/planning”. We need to stop leading with “investing” and start to lead with “planning”. 2. Which methods of educating investors have worked best to increase investor knowledge among self-directed retail investors? Please describe the modes and channels used to reach people and the demographic characteristics of the target audience for such efforts. What should be FINRA’s role with regard to educating self-directed investors? Age is key demographic with respect to financial literacy and education. I am stating the obvious that the younger the planner, the more apt to use a mobile device and social media. As the planner gets older, the social media outlet changes and the eyes force them to use larger screens. The sooner we can get to investors/planners, the better and the easier it is. 3. Which education methods have worked best among investors who receive advice from registered financial professionals? Please describe the modes and channels used to reach people and the demographic characteristics of the target audience for such efforts. What should be FINRA’s role with regard to educating investors who receive recommendations from registered financial professionals? The best education you can give someone who works with an advisor is how to understand the roles of advisors/planners, what questions to ask, how to select and work with an advisor, when to leave an advisor, etc. The basics of investing is also important so that when advisors give recommendations, the client can actually understand and respond in an informed way. 4. What types of effective educational interventions have the highest potential to influence the behavior of investors, particularly newer investors? What are the costs of implementing such interventions? We can leverage machine-learning and artificial intelligence (AI) to get inside the head of an investor/planner and help them overcome the psychological barriers to financial education and wellness. One’s culture, upbringing, patterns, behaviors, relationship and baggage concerning money stands most in the way of someone learning and actually executing on topics of personal finance. 5. What metrics do you use to track the results of educational interventions? To what extent do these results change over time? This hasn’t been fully developed yet because the underlying education is varied, inconsistent and not always effective. The change is only as good as the measurement of its effectiveness. Our nation’s school systems is the best place to start. However, still to this day, personal finance is often confused with economics. Starting to teach “about money” at a young age may be the single greatest thing we can do and yield significant positive results which can be more easily measured. 6. What experience and evidence of effectiveness can you share regarding the integration of investor education into other types of service delivery (such as workforce development, general financial planning or client cultivation)? Financial education and wellness programs exist mostly in large organizations that have the capacity for such benefits. Making these programs more accessible to middle to small businesses will reach a larger audience. There are many intersections and avenues where workplace financial education can make it to the individuals who need it most. 7. What lessons have been learned from qualitative or quantitative study of target audiences, input from behavioral science professionals, data analytics or other inputs regarding effective ways to educate investors generally and newer investors specifically? Behavioral finance is a burgeoning field of study. The smartest people are not always the best investors, and there is a reason for this. Likewise, the wealthiest people are not always the “well”theist either. Financial wellness must be a part of overall wellness education along with physical, emotional, spiritual wellness for example. One who is not “well” cannot make informed, educated decisions about their money. Likewise, one who is extremely stressed about money is not “well”. It’s a vicious cycle that does not discriminate. The primary wellnesses (to include financial wellness) must be taken into consideration for a wholistic solution. 8. Does simulated trading help educate investors or potential investors about different aspects of investing, such as risk, diversification, costs and performance? Not really, as “trading” is a transaction. However, simulated planning with an investment component would. 9. For broker-dealers and other financial services firms that offer investor education resources through mobile apps or websites, what has been your experience regarding customer usage of the tools and information you offer? Which platforms and modalities have the highest utilization? Which have been most effective? Have you measured changes in investor knowledge? If so, how and with what results? The tools and education are not up to date with the rapidly changing landscape of personal finance nor do they focus on planning and wellness. The education remains traditionally “investment”-focused. The most effective approach still remains direct one-on-one dialogue with a professional planner (CFP®) or coach. This is why leveraging technology (AI and machine learning) would be a huge enabler to “humanizing” this effort of educating the masses of American who need it most. 10. How might FINRA and the FINRA Foundation best serve the field of investor education? Start with an innovation/ideation exercise and go from there!
Lynne Celia Comment On Special Notice – 6/30/21
1. What is the single most neglected area in the field of investor education? How might this area be developed? Bar none, the most neglected area is financial planning -- investing being just one of five primary focus areas. Investment, tax, estate, insurance and retirement planning all need to be discussed and aligned with one’s life/financial goals. It can be developed by changing our mindset/paradigm from “investor/investing” to one of “financial planner/planning”. We need to stop leading with “investing” and start to lead with “planning”. 2. Which methods of educating investors have worked best to increase investor knowledge among self-directed retail investors? Please describe the modes and channels used to reach people and the demographic characteristics of the target audience for such efforts. What should be FINRA’s role with regard to educating self-directed investors? Age is key demographic with respect to financial literacy and education. I am stating the obvious that the younger the planner, the more apt to use a mobile device and social media. As the planner gets older, the social media outlet changes and the eyes force them to use larger screens. The sooner we can get to investors/planners, the better and the easier it is. 3. Which education methods have worked best among investors who receive advice from registered financial professionals? Please describe the modes and channels used to reach people and the demographic characteristics of the target audience for such efforts. What should be FINRA’s role with regard to educating investors who receive recommendations from registered financial professionals? The best education you can give someone who works with an advisor is how to understand the roles of advisors/planners, what questions to ask, how to select and work with an advisor, when to leave an advisor, etc. The basics of investing is also important so that when advisors give recommendations, the client can actually understand and respond in an informed way. 4. What types of effective educational interventions have the highest potential to influence the behavior of investors, particularly newer investors? What are the costs of implementing such interventions? We can leverage machine-learning and artificial intelligence (AI) to get inside the head of an investor/planner and help them overcome the psychological barriers to financial education and wellness. One’s culture, upbringing, patterns, behaviors, relationship and baggage concerning money stands most in the way of someone learning and actually executing on topics of personal finance. 5. What metrics do you use to track the results of educational interventions? To what extent do these results change over time? This hasn’t been fully developed yet because the underlying education is varied, inconsistent and not always effective. The change is only as good as the measurement of its effectiveness. Our nation’s school systems is the best place to start. However, still to this day, personal finance is often confused with economics. Starting to teach “about money” at a young age may be the single greatest thing we can do and yield significant positive results which can be more easily measured. 6. What experience and evidence of effectiveness can you share regarding the integration of investor education into other types of service delivery (such as workforce development, general financial planning or client cultivation)? Financial education and wellness programs exist mostly in large organizations that have the capacity for such benefits. Making these programs more accessible to middle to small businesses will reach a larger audience. There are many intersections and avenues where workplace financial education can make it to the individuals who need it most. 7. What lessons have been learned from qualitative or quantitative study of target audiences, input from behavioral science professionals, data analytics or other inputs regarding effective ways to educate investors generally and newer investors specifically? Behavioral finance is a burgeoning field of study. The smartest people are not always the best investors, and there is a reason for this. Likewise, the wealthiest people are not always the “well”theist either. Financial wellness must be a part of overall wellness education along with physical, emotional, spiritual wellness for example. One who is not “well” cannot make informed, educated decisions about their money. Likewise, one who is extremely stressed about money is not “well”. It’s a vicious cycle that does not discriminate. The primary wellnesses (to include financial wellness) must be taken into consideration for a wholistic solution. 8. Does simulated trading help educate investors or potential investors about different aspects of investing, such as risk, diversification, costs and performance? Not really, as “trading” is a transaction. However, simulated planning with an investment component would. 9. For broker-dealers and other financial services firms that offer investor education resources through mobile apps or websites, what has been your experience regarding customer usage of the tools and information you offer? Which platforms and modalities have the highest utilization? Which have been most effective? Have you measured changes in investor knowledge? If so, how and with what results? The tools and education are not up to date with the rapidly changing landscape of personal finance nor do they focus on planning and wellness. The education remains traditionally “investment”-focused. The most effective approach still remains direct one-on-one dialogue with a professional planner (CFP®) or coach. This is why leveraging technology (AI and machine learning) would be a huge enabler to “humanizing” this effort of educating the masses of American who need it most. 10. How might FINRA and the FINRA Foundation best serve the field of investor education? Start with an innovation/ideation exercise and go from there!