Dynamism at the Financial Literacy Forum

Last week, the Exchange hosted the Operation Hope New York Financial Literacy Forum: Rebirth of America, Post Economic Crisis. More information about the program is available here or view the videos here.

The group included well-known figures from financial media, financial services CEOs, foundation presidents, regulators, policymakers, non-profit leaders and even civil rights legend, Ambassador Andrew Young, who serves as the HOPE global spokesperson.

The Forum was preceded by a welcome reception on the Trading Floor on Wednesday night. The floor was filled with energy and an eclectic group connected to the topic. The keynote speakers, addressing the crowd from the Bell Podium, included Operation HOPE’s Chairman John Hope Bryant, the Executive Director of the White House Business Council, Ari Matusiak, as well as Ambassador Young.

Muriel Siebert, the first female member of the Exchange, was honored for both her legendary and game-changing career and for her deep commitment to financial literacy. She told stories of her early days as the lone female member in the 1960s, and she shared her motivation for dedicating her work these days to financial literacy. She saw 17 and 18 year old “kids” declaring bankruptcy, and decided if she had an opportunity to make a difference, she would. And through her work with the Muriel F. Siebert Foundation, she has brought financial literacy to thousands of schools throughout the country.

The Forum continued on Thursday with discussions on how we move forward from where we are today. A recap of what we need to do: encourage and support entrepreneurship as a key to ongoing US financial success; help small businesses thrive and gain access to capital as critical to our long-term economic recovery; increase financial capability throughout our population to improve the financial security of individuals, families, communities – and ultimately our country; ensure that the current recovery is as inclusive as possible, not leaving behind low income communities; engage all sectors – public, private and non-profit – in these efforts because none can do it alone; and improve our education system, both by incorporating financial literacy and more generally, because the kids in school today are our nation’s future.

Talk of job creation and financial education were dominant themes, as was the need to be in communities to make a difference.  Many participants discussed the need for broad shifts in mindset in many areas:

  • When low income communities are viewed by financial services companies as potential new customers rather than people to be helped, the paradigm shifts. Investing in potential new customers is done differently than philanthropy, and can help economically reinvigorate whole communities (I think this is a good example of Professor Porter’s CSV idea in action). A number of the financial services executives talked about the ways in which their companies are taking this approach, and the great opportunity it offers to create strong brand loyalty.
  • This built on a broader discussion about the need to end the vilification of the financial sector since access to capital is critical for entrepreneurs, small businesses and economic recovery, especially in low-income communities. Banks can and must be part of the solution – and we need to find ways to think about this productively without overheated rhetoric, while recognizing the need for changes.
  • While there was much discussion of the tough economic challenges we face, Ambassador Andrew Young – in his own unique inspirational way -  reminded the group that even with the problems that we face – which are very real - this is an amazing country and we have much to celebrate and be hopeful about.
  • Jim Clifton, CEO of Gallup, suggested that an important component of the recovery is a mind shift such that it is “glorious” to be rich. John Hope Bryant agreed in large part, but suggested we need to watch what we mean by wealth - being a teacher can make you very wealthy in ways that matter, and being a drug dealer may make you rich, but will never be the source of true “wealth”.

Some other interesting points:

  • Daniel Eckert, from Wal-Mart, talked about their first-hand knowledge of the hardships people are still facing, as Wal-Mart sees a sharp drop in sales at the end of each month because people are literally living paycheck to paycheck or waiting for their benefit checks.
  • Krishna Guha, now with the NY Fed, talked about the fact that the last economic crisis began with sub-prime mortgages in low income communities, but ultimately impacted the whole financial system. Many changes in the wake of the recent crisis are designed to help prevent the problem we had this time and problems like it, but we all need to be focused on getting ahead of the next crisis, which will be different than this one.
  • John Hope Bryant, as he often does, made the excellent point that money is emotional and that it’s often not about having more money, it’s about knowing what to do with what you have (evidence from low income people who manage to accumulate savings to professional athletes who blow millions and go bankrupt)

In the end, the call was for better education, especially better financial education (in schools, communities, and the workplace), better collaboration among all sectors in addressing the economic challenges we face, and increased support for entrepreneurs and small businesses, which will be critical to our sustained financial success.