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Wis. CUs to study investment eds effect on behavior
PEWAUKEE, Wis. (5/7/09)--A study launched Wednesday that will involve Wisconsin credit unions aims to prove that as little as 10 hours of education can motivate consumers to seek and use the investment tools they need to build wealth. The prescription can not only improve personal finances but also heal a much-weakened national economy, said the Wisconsin Credit Union League. “The investment scams and frauds that worsened the economy over the past year could have been avoided with better financial education,” said John Hoffmire, director with the Puelicher Center for Banking Education at the Wisconsin School of Business, University of Wisconsin-Madison. Hoffmire is spearheading the study. “Americans appear apathetic when it comes to investing, when in fact a small amount of education may be all it takes to stimulate the kind of positive action that will help heal our nation,” he said. The 18-month study will provide up to 30,000 hours of online investment education to 4,000 participating employees, starting with those at credit unions. The study is funded by a $200,000 grant from Investor Protection Trust--and coordinated and promoted by the league, Wisconsin Gov. Jim Doyle’s Council on Financial Literacy and the Wisconsin Department of Financial Institutions. The Educated Investor University provides an online investment education program in which each employee will complete up to 10 hours of online learning. Many will receive additional information about investment products and opportunities, and have access to an educational coach--a formula Hoffmire says is critical to stimulate positive behavioral change in investing. Although Americans save more now because they fear imminent job loss, Hoffmire says it shouldn’t be this level of economic pain that pushes the average person to do what’s in their best interest. Saving is just part of the remedy. Americans are seriously under-prepared in investing for retirement and commonly fail to use investment vehicles such as savings programs for health care and higher education, he added. “We need to identify what can be done consistently to motivate the average household to take advantage of the investment opportunities they’ll need--in addition to just saving--to reach future goals,” Hoffmire said. A prime “teachable moment,” Hoffmire says, is during tax season. Filers often spend tax refunds instead of investing these dollars. The study, therefore, will focus heavily on converting tax filers to investors. Many credit union employees help prepare and file taxes, facilitate refunds via direct deposit and educate about available tax credits and wealth-building opportunities in free tax-preparation programs. The study will seek to determine a preferred approach for coaching and what mix of information works best to encourage investment behavior for different types of filers--based on age, income, education level, geographic location and other attributes. Pre- and post-tests will measure participants’ investment knowledge, and behavior will be tracked quarterly for one year to determine whether participants have initiated investment activity. “We expect that the participating employees will emerge from the study better informed to serve their members’ needs,” Hoffmire adds. “If you understand the importance of investing on a personal level, you’re better positioned to direct members to those resources more effectively.” A steering committee for the study is being assembled from Wisconsin credit unions. Participating credit unions also are being identified so that participant education can begin late this summer. Credit unions’ participation in the program is part of their ongoing REAL Solutions initiative, which strives to help Wisconsin families improve their financial position over time by encouraging saving and investing, improved creditworthiness and long-term wealth building.
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