For Immediate Release: Monday 23 July 2001

AUTIF SURVEY SHOWS NEED TO 
MAKE 15-24 YEAR OLDS TOP PRIORITY
FOR INVESTOR EDUCATION

Work being carried out to encourage greater financial understanding amongst consumers should start by targeting “Learners to Earners” - young adults in their late teens and early 20s.  According to research carried out as part of AUTIF’s Financial Awareness and Consumer Education Tracking Study (FACETS), 15-24 year olds appear the most amenable to improving their financial awareness, but they also rely heavily on friends and family for advice - running the risk of basing investment decisions on ill-researched, anecdotal information. 

Financial Interest and Understanding (Tables 1 - 3)

The research reveals an overall reluctance to learn about finance; 67% of respondents are not inclined to increase their knowledge of any financial area.  But 53% of Learners to Earners are keen to develop their understanding and show particular interest in learning about investment and mortgages.  They would even prefer to learn about tax rather than pensions, the subject about which they are most unsure.

Financial information is especially difficult to convey and to complicate matters further, the overwhelming preference for obtaining such information is in a face to face environment; and even more so for 15-24 year olds.  But it is also the most impractical in terms of imparting huge amounts of information to large numbers of people.  Learners to Earners were less receptive to information supplied through newspapers and magazines compared to other groups, but did show a preference for the internet. 

Investment and Purchasing Profile (Tables 4 –9)

Learners to Earners are only just beginning to invest.  In fact, 77% have no investments at all.  But 55% of 15-24 year olds, far more than any other age group,  place their trust in friends and family for financial information, ahead of a professional adviser such as a bank or IFA.

This preference also affects the way they buy financial products.  Of those with some form of cash/deposit savings, 31% had bought on the recommendation of a family member or friend; 18% through a bank or building society, whilst 6% went to an IFA.    However, of the 6% with an equity investment, 30% had bought through an IFA and 27% from a bank or building society.  But 13% still relied on friends and families for advice on their equity-based purchases.

When asked about how they would prefer to invest, as many 15-24 year olds would simply select the best special offer available (irrespective of what the product was or its suitability), as they would select the best offer for a specific product, or use a discount-based IFA. 

More than any other group, Learners to Earners look closely at charges when choosing an investment, but they pay less attention to past performance and customer service.  However, 14% do not take any particular criteria into account, buying “roughly” the product they want.

Clare Arber, PR Manager at AUTIF, commented:

“It seems only logical to direct any financial understanding initiatives at the Learners to Earners group.  They are still in a learning frame of mind.  If they are equipped with a basic understanding of their likely financial needs, plus the confidence to ask the right questions, they will have the skills to start their financial life on a sound footing. 

“Although the experience of friends and family can be invaluable, it can also be inaccurate.  Increased financial awareness will help prevent possible mistakes in the future and reduce the likelihood of mis-selling scandals.” 

- ends -

(Attachment 1 - Tables 1 - 3)
(Attachment 2 - Tables 4 - 9)

Anne McMeehan, Director of Communications, AUTIF -  +44 (0)20 7831 0898
Clare Arber, PR Manager, AUTIF - +44 (0)20 7831 0898

Notes to Editors:

1.     FACETS (Financial Awareness and Consumer Education Tracking Study) is sponsored by the Association of Unit Trusts and Investment Funds (AUTIF) and is a cross-population study designed and managed by MarketMinder and based on independent data collected by IPSOS, one of the largest operations working in this area and a leading exponent of computer assisted personal interviewing.  The data is analysed across a wide range of socio-demographic splits using MarketMinder.  Data for tables 5, 6, 7 and 8 is taken from the main MarketMinder research service.   (For further details contact Mike Hare - MarketMinder - Tel: 01778 345588)

2.   The FACETS research was carried out in May 2001.  The MarketMinder data was collated over the past six months.

3.   Victoria Nye, AUTIF’s Director of Training and Education is particularly active in these areas.  She is a:


·          Member of FSA Consumer Education Forum and FSA Pensions Education Forum.
·          Member of DfES’s Adult Financial Literacy Group (AdFLAG).
·          Board member of Teacher Training Agency – the only one from a business background.   Appointed by Estelle Morris in
            November last year. 
·          Co-founder of Personal Finance Education Group (pfeg) and now Board Director.
·          Governor of state secondary school in London – with special responsibilities for careers/work experience and 
            business links.
·          Author of CSFI publication on the role of the regulator and consumer education (1998)