Are You Financially Literate?

By: Brittany DeDiego, Fall 2014 Intern

gradeMost Americans are financially illiterate. According to the President’s Advisory Council on Financial Literacy, financial literacy is the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being. Financial education is defined as the process by which people improve their understanding of financial products, services, and concepts, so they are empowered to make informed choices, avoid pitfalls, know where to go for help and take other actions to improve their present and long-term financial well-being.

In 2009 and 2012, the FINRA Investor Education Foundation conducted a study about the financial capability in the United States. To test participants on their financial literacy, respondents were asked a series of questions covering fundamental concepts of economics and finance expressed in everyday life, including questions about interest rates, inflation, and the impact of a shorter payment term on a mortgage. The results showed that only 14% of respondents were able to answer all five questions correctly, and 39% were able to answer at least 4 of 5 questions correctly.

The study also tested respondents’ self-perceptions of their own financial literacy. Overall, the respondents had positively biased self-perceptions of their financial knowledge. In fact, 73% of respondents gave themselves high marks (5 to 7 on a 7-point scale, with 7 being very high). This disconnect shows that even if you think you are financially literate, there is still room for improvement.

For more information about this study and the methodology used go here. To test your own financial literacy, take the FINRA financial literacy quiz here.

Operation HOPE: Creating a More Financially Literate Future

By: Brittany DeDiego, Fall 2014 Student Intern

learnOperation HOPE is a leading nonprofit social investment banking and financial literacy empowerment organization created in 1992 that works to promote financial preparedness and foreclosure prevention. Continue reading

Americans Are Financially Illiterate According to SEC Study

By: Brittany DeDiego, Fall 2014 Student Intern

signOn July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law. Under this act, the SEC was required to conduct a study to identify the existing level of financial literacy among retail investors as well as methods and efforts to increase the financial literacy of investors. Continue reading

The Creation of National Financial Literacy Month

By: Brittany DeDiego, Fall 2014 Student Intern

On March 31, 2011, President Barack Obama signed a presidential proclamation making April National Financial Literacy Month. According to the proclamation, National Financial Literacy Month was created in response the recent 2008 economic crisis. The purpose of creating this month was to improve the financial literacy and ensuring all Americans have access to trustworthy financial services and products. Continue reading

My Clinic Story: Brittany DeDiego

By: Brittany DeDiego, Student Intern Fall 2014

dediegoAs the semester comes to an end, looking back on my clinic experience I realized how much I have learned both about securities law and about becoming a practicing attorney. The clinic has taught me how to communicate with clients and develop a case from beginning to end, helping me prepare for my future career.

I came into the clinic with very little knowledge about securities law or investment schemes. Through my research this semester for client matters, for our outreach presentation and for my blog posts I have learned about common scams that affect people every day. I learned that investment fraud could happen to anyone and the importance of doing your due diligence before making any sort of investment. I hope that my work in the clinic this semester will help me be a wise investor in the future, as well as be a source of knowledge for my friends and family when they make investment decisions.


Investor Advocacy Clinic Comments on FINRA Regulatory Notice 14-35

By: Brittany DeDiego, Fall 2014 Student Intern

LAW_IACThe GSU Investor Advocacy Clinic is committed to protecting the interests of individual investors. Therefore, in addition to providing legal services and participating in investor education and outreach, the clinic is also actively involved in the public comment process relating to rule changes proposed by FINRA.

The Proposal: Regulatory Notice 14-35

FINRA’s recent Regulatory Notice 14-35, would maintain the quarterly statement delivery requirement, but would allow investors to direct the transmission of customer account statements and other documents to third parties. The change would also allow for statements to be delivered electronically and would require investment firms to include a statement advising customers to report promptly any inaccuracy or discrepancy in their account. This rule will require that the firm, clearing firm and their respective contact information for customer service be clearly and prominently placed on the front of the statement. The contact information for the clearing house, however, can be located on the back of the statement if the information is in bold or highlighted letters.

The Clinic’s Comment

On October 31, 2014, the clinic submitted a comment letter, expressing its support for adopting this rule change. Although agreeing with FINRA that third parties should be able to receive quarterly statements electronically and that SIPA disclosures should be prominently displayed on statements, the rule could go further to protect investors. Continue reading