Updated 19 October 2020

Take outs:

• Improving the financial capability of kids is a great way to start them on their financial journey.
• Building a financial capability toolkit for kids requires pulling together educational and experiential tools, an opportunity financial advisers are well positioned to do.
• Collaboration, evolution and the avoidance of re-creating the wheel are all necessary ingredients of the best financial capability toolkits.

Typically, financial literacy and capability has been the realm of investors and financial advisers.

However today there are a growing number of at home and school related education tools available that are taking these concepts to kids. To find out more about these programs, click here. 

The factor in common to both audiences is the role financial advisers can play in improving the financial capability of families, including kids.

It is a natural extension of the educational role advisers already play with their clients, taking them on a journey as their financial needs and wants change over time. But including kids in on this offer and providing them with some useful tools makes sense.

In a Netwealth webinar titled ‘How to extend financial education to the entire family’, Founder of Banqer and financial literacy advocate, Kendall Flutey said kids are far more capable of comprehending financial concepts than we give them credit for.

“There's a real opportunity in terms of bringing kids into that financial fold, and conversing with them around topics that we usually wouldn't consider they were capable of.”

Banqer was launched in New Zealand in February 2015. A digital financial literacy program for kids, it transforms the classroom into a virtual economy tool.

In 2017, Netwealth helped bring the program to Australia with the aim to make it available to 15,000 Australian kids each year. As of September 2020, almost 8,000 Australian kids are currently experiencing the program and in doing so, starting their financial journey.

Extending financial advice to kids requires some planning, but essentially it is about utilising the resources and skills of financial advisers which they already use with their adult clients.

Flutey says by building and housing these tools in a financial capability toolbox, advisers can open advice to a new audience, a much younger audience, and start them on their financial journey.

A financial capability toolbox is tailored to the needs of a client base and may include Apps, school and at-home programs, content and seminars from financial advisers at school.

Building a financial capability toolbox

Profiling a client base is the starting point for building a financial capability toolbox, to know what resources are needed, and what will be most effective.

As is the case with any communication and education program, not all parts of the client base will require the same resources.

For example, a large proportion of clients may be time poor and have young families. They will require different resources to a family with older kids.

Once the communication and education goals for different parts of the client base have been defined, the right tools need to be selected. This will take some research.

For example, Kendall says advisers could add Spriggy to their toolbox. Spriggy is an automatic pocket money App where children are given the independence to decide their own spending and saving decisions. Pennybox is another such App.

These tools can then be complimented with an educational tool such as the Australian Securities and Investment Commission’s MoneySmart website.

To find out more about these resources, click here.

Advisers fill the gaps

When the right tools and resources have been selected, there are sure to be gaps and this is where an adviser can add significant value.

By building a little bit of content such as bridging or supportive material, advisers can help fill these gaps and customise a toolkit to better meet the needs of users.

Kendall says creating content is a glaring opportunity.

“It's waiting to be created, really, and I'd go as far as reaching out to the guys at Pennybox or Spriggy, or whatever takes your fancy, to see if there's any way they can aid you on this,” says Kendall.

She says the intentions of these Apps and what advisers are offering are aligned, so it is a worthwhile opportunity for both parties.

Another suggestion around the actual content itself, is finding out more on what is already available in the market.

“There's so much out there in this space already, and if there is a resource you can use, I would highly suggest you just use that.”

Making content reusable so it can be used in multiple channels is also beneficial. This could mean writing an article that can be shared in a newsletter, on social media and then using it as a basis for a video or podcast. This approach not only saves time, but it means advisers can focus on their core strengths. A great content idea would be to capture and then share the innovative approaches your clients take today to educating their kids.

“If you can get your clients really engaged in thinking about financial literacy in the same way, you'd be surprised with what they can create for you that then you can use for the rest of your client base,” says Kendall.

A finished toolbox should look like a tailored educational program combining interesting articles, experiential activities and perhaps some online tools or Apps. It should be something that parents and their children can engage in when you are not around, yet when in your presence have a meaningful dialogue about.

When the toolbox is ready, Kendall suggests getting clients and peers to review it. Also check to make sure criteria such as alignment to the education curriculum, the cost of implementation, age appropriateness of the toolbox and whether it balances experience with education, have been met.

“Let people dive in, have a play around, and critique yourself against these criteria here. They should act as a good yard stick as to whether you're on the right track in terms of your toolbox.”

Finally, a financial capability toolbox will evolve as new resources and educational products are coming out all the time. Also, they change as the users change so they need to be kept as fresh and as effective as possible.

Remember, kids can be tough critics.