Improving the financial literacy rates within Ireland will be key to growing Ireland’s economy as well as its funds industry.
This was the point made by Ireland’s minister of finance, Pascal Donohoe, during his address at the Irish Funds annual conference in Dublin yesterday.
According to research carried out by the Department of Finance, which also recently completed a review of the funds industry, almost half of Irish adults do not have the confidence to act on financial advice that would be in their best interests.
“We need to equip our citizens with the understanding they should have to make decisions that would be good for them on an individual level and for their own well-being,” said Donohoe. “And collectively, year-by-year, we would deepen our own pool of capital within Ireland which would be good for our economy.”
The minister recognised the work being done by Irish Funds on this front, including the steps taken to deepen financial literacy in schools.
Irish Funds director Natasha Haugh outlined the various initiatives that have been launched in the last 12 months, including the Irish Funds Transition Year (TY) Programme, designed to give school students the skills they need to navigate the world of personal finance as well as promoting the funds industry as a potential employer.
“The programme is about introducing financial literacy for TY students but also about socialising the jobs that are available in the funds market and debunking the myth that it is an industry dominated by males and maths students,” said Haugh.
Other initiatives, the Skills Framework for Irish Financial Services Industry and the FastTrack into IT Apprenticeship Model, are designed to attract more talent into Ireland’s funds industry and to make it more demographically diverse.
Financial literacy was also raised at the roundtable held by Funds Europe earlier this year with the CEOs of asset managers in Ireland. Improving financial literacy rates would not only help boost the economy and attract talent to the funds industry, it would also help the industry’s messaging and communication strategy.
As Fearghal Woods, head of security services, Ireland, JP Morgan said at the roundtable: “People do associate mutual funds with vulture funds but that goes back to financial literacy. If you understand it, you’ll be able to differentiate it and if you can differentiate it, you can make informed decisions about your investments.”
And as Adrian Mulryan, CEO of Invesco Ireland, added: “[Ireland] is very effective at communicating storm warnings but we are very poor at financial literacy and warning people that a lack of financial literacy can cause more damage than the wind.”
