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ICI Global Applauds IOSCO Investor Education Efforts

London, 31 July 2014—ICI Global is praising a newly formed committee of the International Organization of Securities Commissions (IOSCO) for its ‘focus on retail investor education and financial literacy,’ and describes the regulatory body’s new effort as in step with global investing trends. ICI Global responded to IOSCO’s request for comment on the Committee on Retail Investors (C8) and its Strategic Framework for Investor Education and Financial Literacy.

‘All involved in financial markets—investors, intermediaries, providers, and regulators—benefit when investors are informed, educated, and equipped to make sound decisions about their financial needs,’ said Susan M. Olson, senior counsel for international affairs.

As more countries implement defined contribution systems with individual investment choices, both public and private sectors are placing a greater focus on the need for participant education. In its letter, ICI Global notes worldwide efforts to engage and educate investors and details the critical role public-private partnerships can play. ‘Government and the private sector can work together to leverage one another’s efforts. For example, governments can provide the framework that focuses public and private attention on financial literacy efforts,’ the letter says.

ICI Global draws upon the experience of the Investment Company Institute in detailing successful public-private initiatives. Among the efforts it outlines for IOSCO’s consideration are such programmes as:

  • Designation of a national Financial Literacy Month
  • Financial literacy contests for students and schools, jointly organised by the US Departments of the Treasury and Education, with prizes awarded by the ICI Education Foundation
  • Publicity campaigns encouraging retirement savings, run jointly by private enterprises and US government agencies

The ICI Global comment letter adds that the global fund industry also is ‘developing new means of informing and educating investors, drawing upon the Internet, social media, and other digital communications tools.’

Going forward, ICI Global recommends the committee be ‘mindful’ of two principles:

  • While investor education and financial literacy can lay a solid foundation, education cannot fully replace financial advice in supporting sound investing for many investors.
  • Policymakers should be careful to avoid biasing investor education and financial literacy programs to favour particular financial products or solutions. ‘Investor education should strive to equip potential investors to make choices that best fit their needs and circumstances, not to drive them to particular products,’ the letter says. 

About ICI Global
The international arm of the Investment Company Institute, ICI Global serves a fund membership that includes regulated funds publicly offered to investors in jurisdictions worldwide, with combined assets of US$1.5 trillion. ICI Global seeks to advance the common interests and promote public understanding of regulated investment funds, their managers, and investors. Its policy agenda focuses on issues of significance to funds in the areas of financial stability, cross-border regulation, market structure, and pension provision. ICI Global has offices in London, Hong Kong, and Washington, DC.

About the Investment Company Institute
The Investment Company Institute (ICI) is the world’s leading association of regulated funds, including mutual funds, exchange-traded funds (ETFs), closed-end funds, and unit investment trusts (UITs) in the United States and similar funds offered to investors in jurisdictions worldwide. ICI seeks to encourage adherence to high ethical standards, promote public understanding, and otherwise advance the interests of funds, their shareholders, directors, and advisers. ICI’s US fund members manage total assets of US$17.1 trillion and serve more than 90 million US shareholders. Non-US fund members manage total assets of US$1.5 trillion.