Financial Advice from the Feds -- Coming Soon?

Last Updated Jan 17, 2011 11:11 AM EST

A federally run website with clear, comprehensive and impartial information on consumer financial products is among the top priorities of the President's Advisory Council on Financial Capability, says the council's chairman John Rogers.

"If you're a family and you need advice for your job or saving for college or buying that first home, you'd have one common place to go to for world class ideas and information that would make it easier to execute," Rogers says.

His comments came during a 30-minute interview on the MoneyWatch show Ask the Experts, where I joined him along with host Jill Schlesinger. Rogers, CEO of Chicago-based Ariel Investments, was tapped in October to head the reformulated council, which is a private-sector advisory group hand-picked to help President Obama set the agenda for financial education in this country over the next two years.

Rogers says his goal for the council is to come up with "two or three specific ideas to transform" the way Americans learn about money -- and that a reliable and understandable financial website would fit the bill.

Here at MoneyWatch, we certainly agree that a website can help raise the financial I.Q. of the American public. We believe we're doing our part with unbiased, news-driven financial information and guidance on a daily basis. But there's something to be said for a giant repository of organized, straightforward advice for common money problems and bearing a government stamp of approval.

Rogers didn't offer details. But such a website almost certainly would explain fees and risks associated with products like credit cards and mutual funds; it would likely illustrate things like compound returns and offer guidance about things like the Roth IRA, 401(k) plans, and mortgages. And it would probably include easy-to-use tools like a calculator to figure, say, monthly payments on a car loan.


This kind of information is already available online, but it is spread far and wide and all too often on self-interested websites. Indeed, a new Brookings Institution study says there are some 4,000 financial websites and that a great many raise "concerns with credibility and conflicts of interest with advertisers." Brookings is in the same camp as Rogers, arguing that "a website run by a government agency can mitigate problems with perceived lack of independence."

A government version of such a website already exists at mymoney.gov, which was put together by the Financial Literacy and Education Commission and run by the Treasury Department. This is a useful site. But it hasn't caught on as the go-to place for money advice, and it probably needs more resources to promote its mission and to stay current. For example, a section on the site on credit card advice for college students was written in 2005 -- long before reforms changed the game entirely.

I'm on board with this web effort. It would certainly help prevent some of today's adult consumers from making stupid money decisions. And it's certainly great news that the government has recruited someone of Rogers' stature to lead the charge. But we're going to need a lot more than a comprehensive government website to address our financial illiteracy problem. What about people who don't go online? How can we reach them? What about tomorrow's consumers -- our kids? How can get to them before they they learn the bad habits that have got their parents into so much trouble.

My whole beef with our national approach to financial education is that it is largely remedial. Make a mistake; we'll help you clean it up. And it's mostly geared at adults. We're not inoculating ourselves for the next financial crisis by teaching young people about money in school.

Clearly, we need to reach out to adults who are having trouble. But we also need to teach kids. Rogers believes we can do both. "We think we have great evidence" that kids can learn before tripping up on money matters as adults, he told me. Along with the website, then, maybe a push for more financial education in elementary school and high school will be one of those two or three things.

Photo courtesy Ariel Investments
More on MoneyWatch:
· The Top Reason Kids Don't Learn Money at School
· Teaching Kids About Money, What We're Up Against
· Financial Education Takes a U-Turn
· Taking Financial Education to the Next Level
· Financial Education: Where We're Headed
· Students in Debt: $1 Trillion Hole and More Dropouts

  • Dan Kadlec

    Daniel J. Kadlec is an author and journalist whose work appears regularly in Time and Money magazines. He is the former editor of Time’s Generations section, which was written and edited for boomers. Kadlec came to Time from USA Today, where he was the creator and author of the daily column Street Talk, which anchored the newspaper's business coverage. He has co-written three books, including, most recently, With Purpose: Going from Success to Significance in Work and Life. He has won a New York Press Club award and a National Headliner Award for columns on the economy and investing.