Financial Literacy Project - Project Overview

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Project Overview

The Safeguarding the Financial Wellbeing of Australians by Improving Financial Literacy Project is an initiative of the Centre for Corporate Law and Securities Regulation. The project will study consumer behaviour in Australia relating to the selection of financial products and the role of financial literacy in that behaviour. Drawing from these findings, it will then consider implications for consumer protection laws.

Project Summary

Type of Grant
Australian Research Council Discovery Grant

Funds Received
$276 000

Project Aims
The project will contribute to a broader understanding of the role of financial literacy and consumer behaviour in Australia, and its relationship with Australia's financial services and consumer protection laws. The project aims are consistent with contributing to the Australian Financial Literacy Strategy goals of ‘increasing economic participation and social inclusion, driving competition and market efficiency in the financial services sector, and potentially reducing regulatory intervention.’

Australian consumers of financial products need to make sound financial decisions for their economic security, including retirement planning and to provide for their families. Optimal financial choice increases with higher levels of financial literacy. This project will be the first in-depth study of the relationship between financial literacy and Australia’s financial services and consumer protection laws. In 2012 the research team will conduct a survey of Victorian high school students to assess financial literacy competencies, understanding of financial products and services and attitudes about money. Surveys consistently identify young Australians as having low levels of financial literacy. The project aims to enhance understanding about the factors that contribute to financial literacy to inform the innovation of financial literacy programs in schools.  The project will also evaluate the key areas of complexity and vulnerability for Australian consumers in relation to the financial products available to them.

Behavioural economics identifies the cognitive biases and sociological factors that impact on financial decision making. The project team has published a Research Report on the factors identified in international and Australian surveys that contribute to sub-optimal financial decision making. The Report provides the foundation for research on specific financial products, consumer behaviour and regulation through consumer protection laws.

For further information please contact the project research assistant, Cosima McRae.