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By David Wismer
With economic and market uncertainty a prevailing theme this year, it’s fitting that April 2025 marks the 22nd anniversary of National Financial Literacy Month—“a time dedicated to promoting financial education and empowerment,” notes Money Fit.
The organization explains, “As inflation, global events, and economic pressures continue to challenge households, improving financial literacy has never been more critical. … This month provides a chance for everyone—whether you’re just beginning your financial journey or already managing your budget, savings, and investments—to strengthen your financial foundation. Small changes today can lead to long-term financial success.”
According to Money Fit, communities, schools, nonprofits, financial institutions, and government agencies all participate through “workshops, campaigns, and events designed to promote financial education.”
Why is financial literacy important?
Doug McMillon, CEO of Walmart, and John Hope Bryant, founder of Operation HOPE, are co-chairs of the national initiative Financial Literacy for All (FL4A).
In the forward to Mr. Bryant’s 2024 book, “Financial Literacy for All: Disrupting Struggle, Advancing Financial Freedom, and Building a New American Middle Class,” Mr. McMillon writes,
“I learned early on from both my parents and my grandad, the importance of saving and the value—the power—of compounding interest. Those lessons in money management were formative, and they stuck with me. But as John Hope Bryant writes in Chapter 2, Section I, ‘financial literacy isn’t just about money. It’s about the freedom to make choices, the confidence to take control of our own lives, and of our communities, and the opportunity to shape our own futures.’
“That’s the American Dream—choice, confidence, control. Freedom. It’s about more than just surviving. It’s about living life to its full potential, and when people are empowered to strengthen their financial well-being and make choices that lead to a healthier financial future, the dream can become a reality.”
An infographic on the FL4A website presents a striking overview of the financial realities confronting many Americans today:
Stages of financial education
It seems to me that financial education develops over several stages, from foundational concepts to advanced strategies. The following broad categories offer a brief overview of the types of areas people might encounter on their journey to financial literacy:
Financial foundation: Learning basic financial concepts such as the importance of savings and compound interest, the effects of inflation, safeguarding personal information, and sound spending habits.
Early financial planning: Mastering more complex financial concepts such as how to manage debt (including educational debt), establish credit and use credit responsibly, navigate benefit plans, contribute to a retirement plan, and formulate a realistic budget.
Wealth building: Comprehending strategic financial decisions such as buying property; evaluating mortgage options and insurance coverages; managing household cash flow, emergency funding, and tax planning; maximizing prudent wealth accumulation (qualified and nonqualified accounts); setting up a living will; and planning for the needs of any dependents.
Retirement planning: Understanding concepts that will affect your ability to retire such as investment planning and allocations related to retirement income streams; advanced strategies for tax management and required minimum distributions (RMDs); Social Security, Medicare, and long-term care options; legacy and trust planning; strategies for charitable giving; and funding of a desired retirement lifestyle.
Financial advisers can play an important role in guiding and educating people—and their family members (including children)—in these areas and many more. Virtually all of the financial advisers we have interviewed for Proactive Advisor Magazine consider financial education to be one of their top priorities in working with clients. One adviser we interviewed put it this way: “I believe that all people are fully capable of making sound decisions—even in the complex world of high finance—if they learn important financial concepts and can clearly grasp the implications of the choices they face.”
When educating clients, advisers often discuss the following important financial themes, among others:
• The significance of understanding your relationship with money from a behavioral finance perspective.
• The value of goals-based, “holistic” financial and investment planning.
• The importance of understanding diversification, market cycles, and investment risk management, especially for clients nearing or in retirement.
• The power of compounding and how it relates to the mathematics of bear market portfolio losses and subsequent recoveries.
• Why the “sequence of returns” matters when planning for retirement income.
FPI’s focus on education
It’s no coincidence that the members of the Flexible Plan Investments (FPI) team who collaborate closely with financial advisers are known as business consultants. Their role centers on providing vital information to assist advisers in identifying solutions and constructing portfolios that align with the unique goals and risk profiles of each investor client.
FPI supports adviser and client education in several ways (note that many of these tools require adviser login):
• A robust, continually updated website that provides both advisers and investor clients with a wealth of information. As FPI’s leadership puts it, “It is important that our website, presentations, and interactions clearly articulate who we are, what we believe in, why we do what we do, how and where we do it, and how our efforts can benefit advisers and their clients.”
• Webinars for advisers, covering new product or strategy offerings, the specifics of strategy performance over various time frames, or educational/practice management content. FPI’s consultants are also available to support adviser-led client-education events.
• Sophisticated analytical tools, including the Crash-Test Analyzer, Illustration Generator, Composite Performance Report, and OnTarget Investing process. These tools help advisers build suitable client investment portfolios, while also adding value to an adviser’s practice. OnTarget Investing, for instance, helps advisers and their clients set and maintain realistic investment expectations, delivering a customized, personal benchmark for their portfolio or strategy in an easy-to-read format.
• FPI’s My Business Analyzer, a customized dashboard that helps advisers to more easily view and evaluate their aggregated or individual FPI client accounts.
• An extensive library of resources, including white papers on investment topics (available to advisers after login), weekly “In My Opinion” columns, market updates, and strategy performance reviews. These provide timely information for both advisers and their investor clients.
Please check out FPI’s website, emails, webinars, market insights and analyses, and press page for a continuous stream of valuable content. Whether you’re an adviser or investor, those insights may help add significantly to your process for well-informed decision-making.