It is a pleasure to be here today to launch ASIC's Consumer Education Research.
This research was commissioned by ASIC to find out just what information and education materials are now available to the consumers who use financial services.
As we know, Australians are increasingly embracing financial services, whether it be shares or super or arranging a mortgage over the Internet.
It is a trend which the Government wants to encourage. Because we believe it is important for consumers to have greater control over their financial lives.
And the best way to get this control is through education.
The Government believes that consumer and investor education will play a crucial role in helping people choose the financial products which best suit them, while at the same time minimising the chances of those investors running into problems.
That is, consumer education gives consumers the confidence to be part of the financial services marketplace.
In fact, education is a key part of the Government's wider thinking on consumer affairs and that is the philosophy of consumer sovereignty.
There are four parts to consumer sovereignty. First and foremost, consumers must feel sure the Government has in place a legal system that will protect them. Protection is crucial.
Second, consumers must enjoy a wide range of choice of products and services.
Third, in cases when their standards are not met, consumers need effective redress to quickly remedy transactions that are unfair.
And finally, consumers must have sufficient information to make real choices between the products they want. That is where education comes in. And this is where the value of this report lies.
But to put it more simply, education helps empower consumers. It helps them make better choices, it protects them against bad deals and it lets them come to grips with the mass of information flowing around the marketplace.
Ladies and gentlemen, the research I am launching today will help ASIC get the most out of its consumer education work.
ASIC now has a much wider consumer protection role in the financial services sector, and consumer education will be one of the important tools it has to promote consumer sovereignty.
But it needs to undertake this work with a good understanding of what material is already out there and who's doing the work whether it be the Government, industry or community groups.
This is a sensible approach from the finance sector regulator, and I'm also pleased to see that the research was done in consultation with the ASIC Consumer Advisory Panel.
I also think this research will help other organisations in the financial services arena with their consumer education efforts.
I was impressed to see the participation of a range of financial services sector, community and government organisations in this research. In fact, around 150 organisations took part in the 'stocktake'.
What's more, the research involved a full electronic web search and that meant nearly 100 relevant web sites were visited and reviewed.
Ladies and gentlemen, I would also like to applaud the good work done on this project by the Financial Services Consumer Policy Centre, and the cyber research done by Information Edge.
Interestingly, the research found more material than expected. This is a promising sign.
However, it's fair to say that this material does not evenly cover the whole financial services sector and is not evenly distributed across the community. This finding provides some important pointers for those financial services organisations wanting to do more consumer education, and I expect that ASIC will also look to target some of its education to those areas that need it most.
So what did the research uncover?
It found that industry played just as important a role as government in providing education material. Community groups also played an important role, especially in getting information to specific vulnerable groups.
These are key findings, as no one organisation can do this work all on their own. Each type of group brings its own expertise to the education field.
And as we move forward, ASIC will have to work in consultation, and sometimes in direct partnership, with industry and community groups. I note some examples where it has already done so, such as its brochure on choosing a financial adviser with the Financial Planning Association.
It is also promising to see some cases where partnerships between industry and community groups have already been set up, such as the booklets on general insurance put together by the Consumer Law Centre of Victoria and AAMI.
I am encouraged to hear that ASIC's next step will be the release of a draft consumer education strategy for public consultation and comment. I understand this will involve consideration of whether to set up the 'database' of consumer education material as a publicly accessible resource, most probably on-line.
Today, I would also like to suggest that ASIC investigate the development of a system of labelling for Australian Financial Services. This would be a badge of reassurance that can be recognised globally as proof that Australian products and services are backed by Australia's robust regulation.
Ladies and gentlemen, the Government is committed to a more efficient financial services sector, and committed to encouraging more confident and better-informed financial consumers.
Consumer education contributes to both of those aims, and the ASIC Consumer Education Research will go a long way to ensuring that industry, community groups and government agencies all set high standards in this key area.