Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, August 30, 2012

SEC Releases Staff Financial Literacy Report

The SEC posted on its website a SEC Staff Study Regarding Financial Literacy Among Investors, which was mandated by Dodd-Frank section 917.( Download 917-financial-literacy-study-part1[1])  As described in the SEC's press release, 

the study draws on numerous sources, including online survey research, focus group research, public comments to the SEC, and a Library of Congress review of studies of financial literacy among U.S. retail investors.

The study identifies investor perceptions and preferences regarding a variety of investment disclosures. The study shows that investors prefer to receive investment disclosures before investing, rather than after, as occurs with many investment products purchased today. The study identifies information that investors find useful and relevant in helping them make informed investment decisions. This includes information about fees, investment objectives, performance, strategy, and risks of an investment product, as well as the professional background, disciplinary history, and conflicts of interest of a financial professional. Investors also favor investment disclosures presented in a visual format, using bullets, charts, and graphs.

As a strategy to improve financial literacy, OIEA and other FLEC participants will work jointly and collaboratively to develop programs:
o Targeting specific groups including young investors, lump sum payout recipients, investment trustees, the military, underserved populations, and the elderly;
o Promoting the importance of checking the background of investment professionals;
o Promoting as the primary federal government resource for investing information; and
o Promoting awareness of the fees and costs of investing.

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I wanted to share this video that documents how we are using financial literacy as a tool to create a college-going culture in East Los Angeles. The link is:

Jesse Torres

Posted by: Jesse Torres | Aug 31, 2012 8:43:06 PM

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