Financial Literacy for the Next Generation

Overview

Over my forty years in the financial services industry, I have consistently been amazed at the positive impact our profession can have on the lives of clients.

One way in which we help clients is by providing them crucial financial education and financial literacy. Our companies and affiliated organizations, such as The American College of Financial Services, LIMRA and others have lifted the financial health of many Americans by teaching people how to make sound financial decisions. The profession has made great strides in providing financial literacy, focusing on the importance of saving for retirement, providing insurance to families, and highlighting the unique financial needs of various groups, such as women and underserved communities. As someone deeply involved in sales and leadership, and as a partner at Insurex, I also believe we have an opportunity to generate thinking, now, for the next generation of clients that is largely unfamiliar with planning.  In doing so, I hope to influence new products and services to be delivered, including what looms ahead: AI driven “agents” and underwriting.

Before you think that AI “agents” won’t happen, think again.  The model is in the developmental stage. Regulatory hurdles are real but likely overcome.  The cost of delivering products, including sales and marketing, will be reduced.  This will allow companies to reach massive new audiences, notably young clients who have superbly adapted to bot chats without fear or intimidation.  They are making other major financial decisions now, such as purchasing automobiles and even investment properties, using AI.  Can insurance-based products be far behind?

Young clients matter. Before you dismiss an AI driven insurance economy, let’s look back at how we, as a financial community, shape our course.

As a very young child, my four siblings and I grew up rather privileged, with a father who was a successful psychologist and professor, a stay-at-home mom, and plenty of domestic help, including nannies, housekeepers, etc. We went on luxurious vacations, collected closets full of unworn clothes, and had truly no concept of the real world.

That all changed drastically when I turned six years old and secretly listened-in to a phone call that I should not have been on. I answered the phone line in the bedroom while my mother, who was pregnant at the time with my younger sister, used the kitchen line. In a moment that I will never forget, I overheard my father telling her that he wanted a divorce. I had no idea what the word ‘divorce’ even meant and naively had to ask my mother the meaning of the word later.

What followed was a truly terrible sequence of events. We lost our family house, (a four thousand square foot home comprised of six bedrooms, four bathrooms, and more than two acres in a quaint, affluent town), and moved to what felt like a foreign planet: a two-family, two-bedroom apartment in an inner-city neighborhood, forced to buy our groceries with food stamps. For my family of six, the new scenario was catastrophic.  

Although my mother received some alimony and child support, what she did not possess was any financial education or access to the tools she would need to make smart financial decisions for our family. This experience forever instilled in me a passion for financial literacy and a fervent motivation to provide others the critical knowledge and skills needed to avoid the financial struggles that plagued my family.  

While our industry has progressed tremendously in countless areas over my career, one area in which we still have much work to do is how we educate younger generations in financial literacy. Our youth are currently not receiving the financial education they need to grow into financially independent adults, and, as leaders in the financial services industry, we must step in.

My hope is that through highlighting the gaps in the current financial literacy education landscape, our industry may then strive to fill these voids.  As will be made clear, there are numerous substantive and concrete steps that can be taken to address this issue. By providing young adults with the tools and information they need to make informed financial decisions, we can empower future generations with financial responsibility and financial independence.

One early question: will agents and advisors do this on their own? Do they rely on the home office/HQ to provide that direction? What’s the right balance of independent learning vs. mandatory, ongoing training on encouraging financial literacy?

Challenge

It is important to define the language that surrounds this topic. In simple terms, financial literacy is the knowledge someone needs to understand basic financial concepts and products, allowing them to make sound financial decisions. The National Financial Educators Council adds that financial literacy also helps to improve a person’s confidence and sentiment as they consider the topic of finances[1]. Studies show, as well as anecdotal evidence, that financial education can make a significant difference in the lives of young adults. Financial behaviors such as improving their credit scores, lowering debt, and making better decisions about college loans can transform their lives. Giving young Americans access to this information starting as early as middle school and into high school is essential for setting them up for financial success as adults.

Financial literacy should begin at home, but the reality is that the issue of family and personal finances is a topic that many older persons avoided discussing. Further, a parent or adult who lacks financial literacy is often unable to pass on important knowledge to their children. This causes the problem to compound from generation after generation, leading to our current situation where children have little to no financial knowledge and no resources to gain this vital information that they lack.   Thus, in many cases the need for education exists, but if the younger person seeks information, they may do so from Instagram, a search engine or from friends who may opt for less than ideal and often overpriced products.  Try AI generated program such as ChatGPT and ask a basic question about buying or selling a life insurance product such as whole life vs. term, or whether an annuity is a credible or horrible solution for a couple in their 50’s, and read the content provided, today, to your prospective clients. Get ready to have your eyes opened!

When talking about the issue of financial literacy, it is easy to discuss the problem in the abstract. However, it is crucial to avoid this tendency, and rather track our progress, or lack there of, using statistics and concrete benchmarks. Below are some startling statistics that show how real and alarming the current state of financial literacy is in the United States today.

Less than 60% of American adults are considered financially literate, according to a survey from Standard & Poor’s.[2]

More than 50% of Gen Z members were unfamiliar with certificates of deposit, high-yield money market accounts, or Roth IRA’s.[3]

Less than half of all high school juniors and seniors reported that they felt prepared on how to open and manage a simple savings or checking account.[4]

Only three in ten Gen Z and Millennial adults say they feel very or extremely knowledgeable about life insurance.[5]

Only 25% of American teens have confidence in their personal financial knowledge.[6]

73% of teens have the desire for more personal financial education. [7]

As shown in these disturbing statistics, young adults reported low levels of confidence in their ability to establish the basic financial habits that would ensure their long-term financial wellbeing. Specifically, basic skills like managing checking and savings accounts, responsibly accumulating credit, and purchasing life and health insurance are all critical for young adults as they move toward financial independence. While many young people believe financial literacy is a topic for older adults, they fail to understand that their poor financial decisions of today could carry negative consequences throughout their entire lives. It is essential for the future of our next generation, and for our country as a whole, that we work tirelessly to fill this gaping void in financial education.

Current State of Financial Literacy Education

Financial service companies, non-profit organizations and state governments have all made some positive strides in filling this void, but are not nearly collaborative or organized enough. This clashing of various efforts, while well-intentioned, falls short in delivering relevant and timely content, how, where, and when a young person needs it. Ultimately, the current state of financial literacy education is plagued by two main issues: an inconsistency in the quality of financial education courses being taught and a lack of training and standards for teachers providing the financial literacy education. These flaws have led to financial literacy curriculums fundamentally falling short.   Ask your local high school principal how many visits that school has received from credible financial planners with designations of worth to discuss financial literacy in the past year, and you will likely be surprised, or not, that the answer is zero. Try it.

As previously stated, inconsistencies exist in nearly all facets of the topic. Inconsistency between the quality of education provided by various states, inconsistency in the training of financial literacy educators and inconsistency in the specific content of the curriculums offered, just to name a few. However, for the purposes of this research, the problem has been broken into three main topics:

State Legislation vs. Federal Legislation, Mandatory Education vs. Voluntary Education

Curriculum, Content, and Teacher Certifications

Lack of Sufficient Life Insurance Curriculum

State Legislation vs. Federal Legislation, Mandatory Education vs. Voluntary Education

The current divide between state legislation and federal legislation mandating financial literacy education is rather one sided. Federal legislation on the topic is extremely limited, and state legislatures have spent far more time and resources on the issue. For this reason, the majority of research and discussion focuses on state legislation. However, there are a couple pieces of federal legislation worth noting.

For one, The Financial Literacy and Education Commission was established under Title V, the Financial Literacy and Education Improvement Act, which was part of the Fair and Accurate Credit Transactions Act (FACT) Act of 2003.[8] The Commission was designed to coordinate the financial education efforts throughout the federal government, support the promotion of financial literacy by the private sector, while also encouraging the synchronization of efforts between the public and private sectors. While this mission is certainly worthwhile, the need for this commission highlights the pressing problem it was created to solve. There are simply too many organizations and groups trying to attack this issue. While on the surface this sounds like progress, there is a critical lack of cohesion and collaboration between these various groups, ultimately limiting the amount of success that they can have tackling this issue.

It may be the case that this issue, like much of education legislation as a whole, is best tackled at the state level. Simply put, the education needs of students in Brooklyn, may differ from the needs of students in Indiana, or Los Angeles. On the state level, momentum is growing each year as more states are requiring their students to take a personal finance course.  The latest analysis from The Nex Generation Personal Finance Organization highlights the significant increase in the number of states that now require students to take a personal finance course before high school graduation.[9]

Year	# of States Requiring Financial Literacy Education for High School Graduation
2020	8 States
2021	11 States
2022	17 States
2023	25 States
2024	35 States

To date, thirty-five states require a personal finance course in high school in order to graduate, while additional states offer courses on the subject, but do not require them for graduation. With thirty-five states currently requiring financial literacy education, more than four times the number of states only four years ago, it is clear that progress is being made at the state level.

This progress is further highlighted when examining the quality of the financial education currently being offered. The Center for Financial Literacy at Champlain College extensively researched the curriculums currently in place and graded all fifty states and the District of Columbia on their curriculums being offered, if any. Although their 2023 report found that only seven states received an A grade on their financial literacy curriculums, only a two-state increase from their previous 2017 report, change is happening very quickly and will be accelerating dramatically over the next five years. States are so rapidly passing laws and changing regulations that Champlain College estimates to have twenty-three grade A states for the graduating class of 2028.[10]

However, we have much work to do.

While progress has certainly been made on the number of states requiring financial literacy education, many students are still being left behind. The Council for Economic Education reports that in the next five years only four out of every ten high school students in the U.S. will be enrolled in high schools where a personal finance course will be required before graduating.[11] With 70% of states requiring financial literacy courses, but only 40% of students receiving them, we must contact legislators in writing and  in person and ask how they will commit to mandated financial literacy.  The next Congressional and Presidential election in 2026 will be our opportunity to raise this question as insurance and financial professionals!

Curriculum, Content, and Teacher Certifications

In addition to the simple number of states offering financial literacy courses, a disparity also exists when examining how this education is being provided. There is an immense need for increased consistency when it comes to the specific curriculums being taught, the certifications of the educators teaching these courses, and local mandates.

Diving deeper into the issue, past merely the number of states requiring courses, reveals large disparities in the quality of the financial education students are receiving, if they receive it at all. Regrettably, these disparities often follow longtime socio-economic divides. John Pelletier, The Director of Financial Literacy at Champlain College, sums up this issue, writing, “If you leave it up to local control, the districts most likely to unilaterally do this locally, they’re white, and they’re rich. So, you would argue that the folks that need it the most are the least likely to get it unless the state requires everyone gets it.” He goes on to say, “that all too often, students from underprivileged backgrounds enter adulthood with insufficient knowledge of personal finance, which helps to continue the cycle of poverty and inequality.”[12] The disparity in the quantity and quality of resources that different states and communities are providing to the cause of financial literacy, in addition to the lack of federal oversight, has led to a significant inconsistency in the quality of financial education that our students are receiving.

Further, the inconsistency of the quality of financial education American students are receiving stems from the educators teaching financial literacy courses. Education Week’s May 2024 publication highlights that with the majority of states now offering or requiring financial literacy courses, there is an immense need for qualified educators to teach these courses. They estimate that number of educators needed to be well over eighteen thousand.[13]

With most states not having the resources to meet this demand for qualified educators, they are turning to the teachers that they already have on staff. Concerningly, most states do not require any expertise, certification, or qualification in the field of financial literacy to teach their financial literacy curriculum. Many schools are simply combining financial literacy courses with other, unrelated science or math courses, and providing the educators teaching these courses with minimal to no training. Currently, on a national or state level, there are no required certifications or accreditations needed to teach specific financial literacy courses. This is a glaring weakness in our country’s financial literacy education program and must be resolved if any significant progress is to be made.

Why Is The Value of Life Insurance Never Taught?

The state curriculum surveyed focused on the basics of budgeting, savings, investing, credit, and debt. While these topics are undoubtedly crucial for a comprehensive financial education, they also have many holes. One glaring void is a lack of any in-depth learning focused on the importance of life insurance. Very little content discussed the different types of life insurance, such as term vs. permanent, how to determine the amount of insurance a person needs based on their age and family circumstances, and the living benefits of life insurance. Most curriculums that did include the topic of insurance focused mainly on health, auto, home, and renters’ insurance. 14

The founder of The American College of Financial Services, Dr. Solomon S. Huebner, was a professor of insurance at The Wharton School.  He began a separate, fully accredited university devoted solely to life insurance (later expanded to financial services) because he argued that the core for financial stability in any family and/or business is the existence of life insurance to protect an individual, family or enterprise from the lost of a key individual.  Who replaces their salary and benefits?  Who pays for food and shelter for those left behind?  Who underwrites the policy, looking at complicated factors including the medical history of the individual, their line of work and past medical issues?  These questions, and more, are as fundamental today as they were a century ago—only now we have a full century of data that helps actuaries in their work.  But even this body of knowledge, massive and formidable, is about to be disrupted by new weight medications, genetic advancements and cloning studies, IVF, AI and more.  Who is keeping up with all of this?  We must, as financial and insurance leaders.

When examining the current state of financial literacy education in this country, it is a story of two narratives. On the one hand, immense progress has been made in increasing the number of states offering financial literacy education, and the number of students receiving it. Moreover, this progress has been made in a fairly short amount of time. On the other hand, the financial literacy education being offered is plagued by a lack of qualified and engaged educators, a lack of resources, and a lack of consistency across the various communities, cities, and states where it is being taught.

Financial Concerns by Generation

Having established the insufficient and often ineffective nature of our country’s financial literacy education, it is next crucial to understand how young Americans who have grown up in this system are affected by this gap in their education.

Adding to the complexity and nuances of this issue, the financial needs, and thus the needs of financial education, have changed greatly between generations. The Baby Boomer generation, for instance, often either went directly to college from high school, or into a trade. Young adults would get jobs, move out of their parents’ homes, and begin to pay their own bills in a short amount of time. Simply put, they became financially independent very quickly.

For Millennials and Gen Z, the story is often very different. These younger generations are approaching major life events such as getting married, buying a home, and starting a family with far greater hesitancy. They face a far tougher financial landscape due to the astronomical rise in the cost of college and buying a home. Because of this, young adults are relying on their parents longer and taking more time to become financially independent. In their American Community Survey, The National Association of Home Builders states that approximately nine million young adults ages 25-34 live with their parents or parents-in-law.[14] Further illustrating this point, The Pew Research Center released a report in January 2024 noting that 57% of adults 18-24 still live with their parents.[15] This clear shift in the way young Americans grow up and begin their financial lives means their financial needs are changing as well. As the financial needs of young adults change, so must the financial literacy education being offered to them.

The complicated and merciless financial landscape that younger generations have grown up with has also saddled them with greater economic stress than previous generations. Many young adults grapple with high housing costs, heavy student debt and severe inflation. When the COVID-19 pandemic struck the US, these economic concerns only became more severe. While much research and discourse has taken place over the physical health effects of COVID-19, one very underreported aspect of the pandemic is the mental health effects of the financial stress resulting from the pandemic. Interestingly, young adults reported increased anxiety and depression at a significantly greater rate than older adults following the pandemic.

Data from the 2024 LIMRA Insurance Barometer Study shows that young adults report higher levels of concern than older generations when it comes to a variety of basic financial matters.[16] 

What all of this reveals, more than anything, is that the need for improved financial literacy is not assumed, implied, or abstract. The lack of sufficient financial education is supported by concrete data, and having a direct and clear impact on the mental health and stress of young Americans. While the ineffectiveness of our country’s financial education is clear, here we see how this lack of knowledge has affected the generations whom have been let down by this insufficient system.  

One of my partners at Insurex, Larry Barton, Ph.D., is past President and CEO of The American College of Financial Services.  He has shared with me the massive public policy implications of this quagmire where future generations lack formal awareness of financial literacy.  With a doctorate in public policy, he has studied these issues in depth. Among his concerns that I share: today’s young workforce may rely upon peers who make poor decisions (such as not participating or delaying participation in a health savings, 401k or 503(b) plan), purchase expensive policies from advisors with a questionable track record or purchase of a first home or other expensive investment without the sage counsel of parents, advisors and others—in short, impulsive decisions absent of insight where an agent/advisor places the well being of the client above their own, a standard emphasized in the teaching of Dr. Huebner at The Wharton School a century ago!

DIY Financial Literacy: Social Media & AI

With the hole in our country’s financial literacy education program both significant and expansive, the question becomes where can these young people seek out this critical missed information? Interestingly, the answer to this question comes from an unlikely source.

John Egan, a financial expert writing for Forbes, researched this question and concluded, “80% of Young Adults get financial advice from social media sites such as YouTube, Instagram, TikTok and Facebook.”[17] While this number is staggering, further research provides even greater insight into just how significant of a role social media is playing in the financial education of our youth.

In March of 2023, Egan commissioned a survey and found the following significant evidence, ultimately helping to paint the broader picture on the subject. These statistics apply specifically to the Gen Z and Millennial generations.  They impact all Insurex clients and, if you are not one, your own practice or enterprise:

76% believe financial content on social media has made it less taboo to talk about money.

62% feel empowered by their access to financial advice on social media.

50% have made direct money because of financial advice they received on social media.

Concerningly, the survey went on to say that just 31% of Millennials and Gen Z’s regularly check the experience and qualifications of people who supply financial advice on social media. What must be concluded from the totality of this information is twofold. First, social media has become an invaluable source of financial education for young people and has been an important, if not the most important, way young people are filling this void in their education. Second, as with social media as a whole, it becomes critical for us as an industry to ensure that the financial information being shared on social media is well-intentioned, well-informed, and consumable. We, as financial professionals, must help ensure that social media is flooded with accurate and relevant financial literacy material. This must lead us to becoming more active and engaged in social media and viewing it as an invaluable tool to reach a new generation rather than an entertainment young people use.

Unfortunately, studies and statistics provide this idea that the financial industry is currently undervaluing and underutilizing social media as a tool. Simply put, the financial services industry is way behind other industries when it comes to utilizing social media. According to the 2024 Social Media Industry Benchmark Report, this proves to be true for all four major social media channels: Facebook, YouTube, Instagram and TikTok. When compared to the top fourteen industries, including alcohol, fashion, food & beverage, higher education, home décor, influencers, media, non-profits, retail, sports teams, tech & software and travel, the major financial services brands sat at or below the median in social media use.

Statistic after statistic continues to point to the same conclusion. Social media has a massive, undeniable influence on our younger generations, and regardless of the wishes of the financial services industry, it has become a resource of financial education. Young people have made this decision for us. Thus, it is up to the industry to adapt and meet these young people where they are. For any remaining skeptics on the potential value of social media as a financial literacy resource, anecdotal evidence may surprise at how high quality the content can be.

Any discussion of the financial services industry utilizing social media would be incomplete without noting compliance and constraints. Our industry has a number of regulatory and compliance constraints in place to protect the consumer. These regulations are designed to protect the consumer, by limiting what financial services companies and financial advisors can do and say on social media. Importantly, these same constraints seem to not exist for social medial influencers, marketers, and entertainers, who are not employed in the industry. When financial services companies and professionals broach this issue and look to expand their social media reach, it is vital that they do so within the limits of these regulations.

As we look towards the future and dive into how we can correct this issue in our financial literacy education, artificial intelligence, A.I., becomes an interesting possibility. As in many other industries, the financial services industry is exploring how A.I. can be used in nearly every facet of the profession. A.I. is becoming a powerful tool in today’s fast-paced, digital environment.

Many experts believe that A.I. has the ability to enhance financial literacy by bringing more clarity to personal finance. “There are pros and cons of using generative A.I.  and ChatGPT to boost financial literacy and what it means for financial education”, writes Michael R. Roberts, a finance professor at The Wharton School.[18] Roberts went as far as to put generative A.I. to the test by making ChatGPT take several financial literacy assessments. Roberts’ research showed that ChatGPT demonstrated a high level of financial literacy, and the responses it gave were often detailed and exceeded the scope of the question.

Roberts is far from alone in his research on how A.I. can help improve financial literacy in this country. Oliver Ames, a writer on the financial services profession, describes, “A.I. has made significant strides in various fields, including personal finance. While A.I.’s role, in investment advice is still debatable due to the personalize nature of investing, its potential to aid financial education is undeniable.”[19] Ames goes on to highlight the fact that ChatGPT can demystify complex financial terms and concepts, making them accessible and digestible to everyone. Research like his is showing that A.I. is making financial literacy consumable to even the most uninformed and naive. He explains that A.I. can adapt and tailor its explanations to the user’s knowledge level, thereby removing the intimidation factor and foster better understanding. Ames crystalizes this point when he writes, “many people hesitate to ask questions about finances for fear of sounding uneducated but with AI tools a person can ask a question, no matter how basic, and receive a clear, non-judgmental answer”.

While A.I. is not perfect in its current form, Roberts, and the many others who have researched the subject, often note that any lack of precision or clarity in the phrasing of a question can throw ChatGPT off course and lead to a misinterpretation of the intended question.

After examining the ongoing research on the subject, it becomes clear that A.I. will play a large role in addressing financial literacy in the future. However, current research also suggests that this increased role of A.I. may not come in the immediate future, with imperfections in the technology limiting its current upside.

Social media and A.I. will likely become powerful tools for financial literacy in the future. The upsides of social media and A.I. both are tremendous, and these platforms have the power to help bridge the gap in our financial literacy education. However, we, as industry professionals, must proceed slowly and methodically in implementing these tools. The financial services industry must conduct further testing and research into the power and scope of A.I. There is no doubt that there will be bumps in the road, and mistakes will be made, when implementing social media and A.I. into the financial services industry. Change is slow and methodical, but the upside of these tools is worth the risk in this worthy pursuit.

Conclusions & Proposed Recommendations

After broad and comprehensive research on the subject of financial literacy education in America, it can be concluded that the financial services industry and the federal and state governments have made tremendous inroads in recent years. Today, thirty-five states require students to take and pass a financial literacy or personal finance course to graduate high school. This number is up from a mere eight states only four years ago in 2020. Forty percent of students in U.S. public schools are currently enrolled in such high schools where a personal finance course will be required before graduating. This progress suggests that the goal of all fifty states requiring this financial literacy education by 2030 is certainly attainable if momentum can continue.

Additionally, many financial services companies are investing in financial literacy. FutureSmart is a nationwide initiative implemented by The Mass Mutual Foundation that brings critical financial education to middle school and high school students, as well as families and educators. Mass Mutual has pledged to reach nearly six million students soon across all 50 states, delivering financial education to students of all backgrounds. Moreover, Prudential Financial’s Emerging Visionaries’ Summit empowers young changemakers through grants of $15,000 each. The 2024 Grand Prize Winner, Caden Harris, a fourteen-year-old from Georgia, founded “Financial Literacy for All” a program on wheels that aims to create a world in which financial literacy is integrated into the curriculum of every school and is accessible to all young people. Financial Literacy for All operates a financial literacy bus that travels across the country hosting events that teach students the importance of financial education.

Further, it is clear from extensive research that there are a number of immediate actions the financial services industry can take to significantly improve the landscape of financial literacy and financial education in this country. First, the financial services industry must continue to fervently advocate for consistency amongst state governments, the federal government, and professional organizations on the matter. It became abundantly clear in the research that as long as these various involved parties continue to operate independently rather than collectively, progress will be limited. However, the cumulative force of these groups operating cooperatively would certainly be enough to reduce the gap in financial literacy education in the U.S.

There are many specific areas where this cooperation must come. For instance, one way to instill a consistent national curriculum in financial literacy education is to collaborate and partner with peer companies and organizations such as LIMRA and NexGen Personal Finance (NGPF). Many of these organizations already provide sample curriculums and extensive research into their effectiveness. Additionally, financial services companies and nonprofits such as those previously mentioned should collaborate to create consistent teacher certification requirements for teaching personal finance courses. Financial professionals who have this expertise already should also train teachers and/or volunteer to teach these students themselves. Financial professionals, financial services companies, and non-profits such as LIMRA, The American College, Junior Achievement and Nex Gen Personal Finance, absolutely must work together and collaborate with state and federal government agencies to provide holistic financial education for students, and this education must include a basic understanding of life insurance.

Additionally, the financial services industry must work to further leverage social media as a tool to improve financial literacy amongst young people. To do this, practitioners must push for financial professionals and other stakeholders to build a greater social media presence. Credible news updates draw in social media users searching for financial news, but rather than simply sharing links, our industry’s professionals should weave in brief videos with answers to common financial and insurance questions.[20] It is our opportunity to make financial education easier to understand and more consumable for the younger generation.  Financial advisors and insurance professionals have a high level of expertise, and our industry must empower them to share their knowledge and build relationships through a strong social media strategy.  This means we must also engage regulators and lawmakers: disclosures and disclaimers matter, but are they readable to most persons?  Does anyone read them other than legal counsel?  No wonder we are losing another generation, already suspicious of life insurance salespersons!  Disclosure matters.  But unnecessary massive disclaimers the size of a novel cause concern, if not outright opposition, by the very clients needing to be protected with life insurance, annuities, savings plans and more.  Who owns that discussion?

Additionally, industry professionals should seek to partner with topical and trustworthy influencers, to promote financial literacy, enhance their visibility, and build credibility. If financial professionals can become trusted voices to the next generation, it will go a long way in promoting a culture of financial literacy and independence. Although the compliance regulations of many financial services companies extensively limit communications and marketing efforts through social media, our industry must give its advisors more access to this younger audience. This will require giving our professionals the ability to utilize all social media platforms in a broader, more comprehensive manner.

The gap in our country’s financial literacy education is significant, wide-ranging, and incredibly alarming. Our industry risks becoming irrelevant if we do not rapidly evolve to the financial literacy demand of our younger clients and future generations. We must engage, educate, and build trust with them in new and creative ways. It will require a robust effort from all relevant stakeholders, both profit and nonprofit, as well as state and federal governments for this to become a reality. It is not an overexaggeration to say that a generation of financially illiterate adults could burden our nation with disturbing socio-economic problems. From education, to unemployment, to health insurance, there is not a national issue where financial literacy is not front and center. It is imperative for the future of our country that we correct this issue swiftly and comprehensively.

At Insurex, we are partnering with young entrepreneurs on solutions that will reduce the cost of products, accelerate underwriting and delivery, improve financial literacy and encourage new minds to create products that are the architecture of future success for the financial services sector.  Stay tuned, be engaged, and reach out!

[1] “Financial Literacy Definition.” NFEC, NEFC, 26 Mar. 2024, www.financialeducatorscouncil.org/financial-literacy-definition/.

[2] Henderson, Rebecca, and Andrew Dunn. “Financial Literacy Statistics.” MarketWatch, MarketWatch - Guides, 9 Aug. 2024, www.marketwatch.com/guides/banking/financial-literacy-statistics/.

[3] Henderson, Rebecca, and Andrew Dunn. “Financial Literacy Statistics.” MarketWatch, MarketWatch - Guides, 9 Aug. 2024, www.marketwatch.com/guides/banking/financial-literacy-statistics/.

[4] “Financial Literacy for High School Students: Free Course.” EVERFI, 18 July 2024, everfi.com/courses/k-12/financial-literacy-high-school/.

[5] “2024 Insurance Barometer Study.” LIMRA.Com, LIMRA, 15 July 2024, www.limra.com/en/research/research-abstracts-public/2024/2024-insurance-barometer-study/.

[6] Flynn, Jack. “20+ Compelling Financial Literacy Statistics 2023.” Zippia.Com, 16 Aug. 2023. 

[7] Flynn, Jack. “20+ Compelling Financial Literacy Statistics 2023.” Zippia.Com, 16 Aug. 2023. 

[8] Schuchardt, Jane and Hanna, Sherman D. and Hira, Tahira K. and Lyons, Angela and Palmer, Lance and Xiao, Jing Jian, Financial Literacy and Education Research Priorities. Journal of Financial Counseling and Planning, Vol. 20, No. 1, 2009

[9] Finance, Next Gen Personal. “Live U.S. Dashboard.” Next Gen Personal Finance, www.ngpf.org/live-us-dashboard/. Accessed 10 Sept. 2024. 

[10] IS YOUR STATE MAKING THE GRADE? 2023 NATIONAL REPORT CARD ON STATE EFFORTS TO IMPROVE FINANCIAL LITERACY IN HIGH SCHOOLS, Champlain College, 2023, financialliteracy.champlain.edu/wp-content/uploads/2023/11/Champlain-College_2023-National-High-School-Report-Card.pdf.

[11] “Biennial Survey of K–12 Economic & Financial Education: CEE.” Council for Economic Education, 26 Feb. 2024, www.councilforeconed.org/policy-advocacy/survey-of-the-states/.

[12] Epperson, Sharon. “Making the Grade in Financial Literacy: More States Require Students to Take a Personal Finance Course.” CNBC, CNBC, 6 Dec. 2023, www.cnbc.com/2023/12/05/more-states-require-students-to-take-personal-finance-course.html.

[13] Pelletier, John. “Personal Finance Courses Are Booming. Do We Have the Teachers We Need? (Opinion).” Education Week, Education Week, 10 June 2024, www.edweek.org/leadership/opinion-personal-finance-courses-are-booming-do-we-have-the-teachers-we-need/2024/05.

[14] “Share of Young Adults Living with Their Parents Drops to Decade Low.” NAHB, National Association of Home Builders, www.nahb.org/blog/2024/01/young-adults-living-at-home. Accessed 10 Sept. 2024.

[15] Minkin, Rachel. “Parents, Young Adult Children and the Transition to Adulthood.” Pew Research Center, Pew Research Center, 25 Jan. 2024, www.pewresearch.org/social-trends/2024/01/25/parents-young-adult-children-and-the-transition-to-adulthood/.

[16] “2024 Insurance Barometer Study.” LIMRA.Com, LIMRA, 15 July 2024, www.limra.com/en/research/research-abstracts-public/2024/2024-insurance-barometer-study/.

[17] Egan, John. “Nearly 80% of Young Adults Get Financial Advice from This Surprising Place.” Forbes, Forbes Magazine, 24 May 2023, www.forbes.com/advisor/investing/financial-advisor/adults-financial-advice-social-media/.

[18] Roberts, Michael. “Does Generative AI Solve the Financial Literacy Problem?” Knowledge at Wharton, The Wharton School of the University of Pennsylvania, 27 June 2023, knowledge.wharton.upenn.edu/article/does-generative-ai-solve-the-financial-literacy-problem/.

[19] Ames, Oliver. “Leveraging AI for Financial Literacy: A Comprehensive Guide.” VSECU, VSECU, 17 May 2024, www.vsecu.com/blog/leveraging-ai-for-financial-literacy-a-comprehensive-guide/.

[20] “3 Ways Social Media Can Provide Financial Education.” RSS, Denim Social by Capacity, 9 June 2024, www.denimsocial.com/content/social-media-financial-education.

Citations

“2024 Insurance Barometer Study.” LIMRA.Com, LIMRA, 15 July 2024, www.limra.com/en/research/research-abstracts-public/2024/2024-insurance-barometer-study/.

“3 Ways Social Media Can Provide Financial Education.” RSS, Denim Social by Capacity, 9 June 2024, www.denimsocial.com/content/social-media-financial-education.

Ames, Oliver. “Leveraging AI for Financial Literacy: A Comprehensive Guide.” VSECU, VSECU, 17 May 2024, www.vsecu.com/blog/leveraging-ai-for-financial-literacy-a-comprehensive-guide/.

“Biennial Survey of K–12 Economic & Financial Education: CEE.” Council for Economic Education, 26 Feb. 2024, www.councilforeconed.org/policy-advocacy/survey-of-the-states/.

Blairf@rivaliq.com. “2024 Social Media Industry Benchmark Report.” Rival IQ, Rival IQ, 28 Feb. 2024, www.rivaliq.com/blog/social-media-industry-benchmark-report/.

Egan, John. “Nearly 80% of Young Adults Get Financial Advice from This Surprising Place.” Forbes, Forbes Magazine, 24 May 2023, www.forbes.com/advisor/investing/financial-advisor/adults-financial-advice-social-media/.

Epperson, Sharon. “Making the Grade in Financial Literacy: More States Require Students to Take a Personal Finance Course.” CNBC, CNBC, 6 Dec. 2023, www.cnbc.com/2023/12/05/more-states-require-students-to-take-personal-finance-course.html.

Finance, Next Gen Personal. “Live U.S. Dashboard.” Next Gen Personal Finance, www.ngpf.org/live-us-dashboard/. Accessed 10 Sept. 2024.

“Financial Literacy Definition.” NFEC, NEFC, 26 Mar. 2024, www.financialeducatorscouncil.org/financial-literacy-definition/.

“Financial Literacy for High School Students: Free Course.” EVERFI, 18 July 2024, everfi.com/courses/k-12/financial-literacy-high-school/.

Flynn, Jack. “20+ Compelling Financial Literacy Statistics 2023.” Zippia.Com, 16 Aug. 2023.

Henderson, Rebecca, and Andrew Dunn. “Financial Literacy Statistics.” MarketWatch, MarketWatch - Guides, 9 Aug. 2024, www.marketwatch.com/guides/banking/financial-literacy-statistics/.

“Insurance Unit.” Next Gen Personal Finance, Next Gen Personal Finance, www.ngpf.org/curriculum/insurance/. Accessed 10 Sept. 2024.

IS YOUR STATE MAKING THE GRADE? 2023 NATIONAL REPORT CARD ON STATE EFFORTS TO IMPROVE FINANCIAL LITERACY IN HIGH SCHOOLS, Champlain College, 2023, financialliteracy.champlain.edu/wp-content/uploads/2023/11/Champlain-College_2023-National-High-School-Report-Card.pdf.

Minkin, Rachel. “Parents, Young Adult Children and the Transition to Adulthood.” Pew Research Center, Pew Research Center, 25 Jan. 2024, www.pewresearch.org/social-trends/2024/01/25/parents-young-adult-children-and-the-transition-to-adulthood/.

“Nearly 80% of Young Adults Get Financial Advice from This Surprising Place.” Forbes, Forbes Magazine, 24 May 2023, www.forbes.com/advisor/investing/financial-advisor/adults-financial-advice-social-media/.

Pelletier, John. “Personal Finance Courses Are Booming. Do We Have the Teachers We Need? (Opinion).” Education Week, Education Week, 10 June 2024, www.edweek.org/leadership/opinion-personal-finance-courses-are-booming-do-we-have-the-teachers-we-need/2024/05.

Roberts, Michael. “Does Generative AI Solve the Financial Literacy Problem?” Knowledge at Wharton, The Wharton School of the University of Pennsylvania, 27 June 2023, knowledge.wharton.upenn.edu/article/does-generative-ai-solve-the-financial-literacy-problem/.

“Share of Young Adults Living with Their Parents Drops to Decade Low.” NAHB, National Association of Home Builders, www.nahb.org/blog/2024/01/young-adults-living-at-home. Accessed 10 Sept. 2024.

Sharon, Epperson. “Making the Grade in Financial Literacy: More States Require Students to Take a Personal Finance Course.” CNBC, CNBC, 6 Dec. 2023, www.cnbc.com/2023/12/05/more-states-require-students-to-take-personal-finance-course.html.

Yang, Humphrey. “Make Your Day.” TikTok, www.tiktok.com/@humphreytalks/video/7399716900869066014. Accessed 13 Sept. 2024.

Not a source of financial advice. The views expressed are that of the author and not of Insurex.

Copyright © 2025 Susan Cooper. Shared with permission of the author.