Financial school of thought questioned: Should Vendors teach Students?

Sophia Grene:

Financial education falls into the motherhood and apple-pie category – almost everyone is in favour of it. So the news that a number of asset managers have taken part in an initiative by Redstart to provide financial education to English schoolchildren appears positive.

The move has raised concerns, however, chiefly the potential conflicts of interest. Should the vendors of financial products also be allowed to provide education about them?

The founders of Redstart hail from Redington, the investment consultancy. The company has little to gain from getting its name in front of schoolchildren. Redington does not deal with the retail market, so has neither products to push nor brands to promote.

But asset managers, who have proved happy to become involved, are likely to count on schoolchildren being their future customers.

“If financial institutions want to fund financial education, that is all well and good, as long as they have no part in designing it or delivering it,” says Mick McAteer, founder and director of The Financial Inclusion Centre, a think-tank. “If they are serious about doing it for public policy reasons, not just as a Trojan horse marketing stunt, let them fund financial education charities.”