Exactly What do Australian 15-year olds have in common with their peers in New Zealand and Estonia?

Well, inning accordance with the Program for International Trainee Assessment (PISA) report, Australian, Kiwi and Estonian teens rank third-equal on the planet for their financial literacy skills.

The PISA research study, an effort of the Organisation for Economic Co-operation and Development (OECD), discovered only 15-year olds from the Flemish-speaking areas of Belgium and their counterparts in Shanghai understood financing much better than Australian children.

While this is a motivating result it is very important not to check out too much into it. In the first place, PISA surveyed just 18 countries for monetary literacy.

And secondly we needed to share third-place honours with the Kiwis (Estonia we can cope with), which shows that Australia has significant room for enhancement in monetary literacy.

This has actually been identified by a broad series of stakeholders, consisting of the Australian Securities and Investments Commission (ASIC), which is coordinating a nationwide push to improve monetary literacy across the board.

In its just-published ‘National Financial Literacy Method’, ASIC sets out an in-depth plan of action incorporating school curriculum, totally free information services, guidance programs, market collaborations and ongoing research.

ASIC defines financial literacy as “a combination of monetary understanding, abilities, mindsets and behaviours required to make sound financial choices, based on personal situations, to enhance monetary wellness”.

” In today’s fast-paced consumer society, financial literacy is an essential daily life ability. It indicates having the ability to understand and work out the monetary landscape, manage cash and financial dangers successfully and avoid monetary mistakes,” ASIC says. “Improving monetary literacy can benefit anyone, despite age, income or background.”

I fully support the effort to raise the level of Australians’ financial literacy. As a financial advisor I get to see first-hand the, sometimes large, holes in monetary understanding in the Australian community.

Skeptics might argue that the financial literacy space actually fits the advisory industry. From my perspective, the much better the grounding our clients have in monetary principles, the more effective and efficient the advisory relationship.

With a financially-literate population, consultants can cut straight to the real issues instead of training finance 101.

Our money-smart 15-year olds augur well for the future. (Incidentally, while PISA deemed it as “not significantly various”, Australia had a mean score of 526 in the finance test compared to 520 for NZ, which we can take as a win.).