State Treasurers Promote Financial Literacy But Don’t Warn About Widespread Industry Scams


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State treasurers across the country are leading efforts to improve financial literacy. While they may have different experiences or motivations for their efforts to effect positive change, they all agree that more needs to be done to improve people’s financial literacy and change spending habits. The efforts of these elected officials, while laudable, fail to adequately warn the public of widespread scams in the financial sector and could put their constituents at risk.

According to the Financial Industry Regulatory Authority (FINRA), approximately 66% of the American population is considered financially illiterate. This alarming statistic highlights the fact that financial literacy is more important than ever, due to factors such as employers shifting responsibility for retirement planning to workers, financial and technological innovation, the loan debt crisis. students and about 78% of Americans living on a paycheck-to-paycheck.

A high-level view of financial literacy programs in various states shows a plethora of approaches to address these issues:

South Carolina Treasurer Curtis Loftis launched the inaugural cohort of SC Financial Literacy Master Teachers in January 2020, a professional development and training program that uses financial incentives to encourage teachers to integrate financial education into their program and teach workshops to their peers. In addition to making financial literacy in preschools a priority, Loftis is also well known for highlighting the mismanagement and lack of transparency in his own state’s pension fund investments, by tackling the State Pension System Investment Commission; and Wall Street advisers. who charged exorbitant fees while having one of the worst retirement returns in the country.

Scott Fitzpatrick, Treasurer of the State of Missouri, has his own Financial Literacy Portal that provides information on planning for education expenses, understanding student loans and credit, and planning for retirement.

Illinois State Treasurer Michael Frerichs lists financial education resources and activities on his official website for students at all levels, including elementary, high school, and college. The many resources on its website include brochures from the Consumer Financial Protection Bureau on mortgages and the US Department of Health and Human Services on retirement planning and security. There are also links to educational material created by financial services companies BlackRock BLK, State Street STT, and Morningstar MORN.

Each of these approaches fails to recognize that there is much to be learned about common industry abuses that can jeopardize the financial well-being of the public.

My decades of investigating trillions of people have led me to believe that lying, cheating, and theft are so common in financial matters that they are no exception. Unfortunately, teaching the “rules” of finance without addressing the industry’s history of taking advantage of uninformed consumers makes little sense.

And you don’t have to look far for inspiration to teach these lessons. Remember the mutual fund and financial analyst scandals in the early 2000s after the dot-com bubble burst? Enron? Madoff? For investors young and old, the choice is simple: either study Wall Street’s bad behavior and be warned, or risk losing everything you own.

Just as he has cracked down on public pension players in his own state, Curtis Loftis agrees the public needs to be warned about bad behavior in finance. “To accumulate wealth, you must avoid the traps and traps set by a multitude of unscrupulous crooks,” says Loftis.

This, of course, is precisely the financial education Wall Street doesn’t want to promote – the horrific results Wall Street doesn’t want to advertise. Who better than elected state treasurers to make sure the public learns the truths that private industry doesn’t want to tell?

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