The Problem With Financial Education (And Content Marketing)

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A Wall Street Journal article titled Start Early to Raise Money-Savvy Kids states:

“Three of four American teens lack the skills to decipher a pay stub. Researchers at the University of Cambridge concluded that basic financial habits are pretty much set by age 7. A University of Wisconsin report showed that children as young as 3 are able to grasp basic financial concepts like value, exchange, and choice. Teaching kids about money is terrifying for parents who feel shaky about their own financial knowledge. Studies have shown that simply opening a college savings account for a child will exponentially increase the chances the he will go to college. The first step is to talk about money with your children. When kids are young, you can stress the virtues of waiting and delayed gratification, and as children get older you can drive home the idea that spending less than you have is the linchpin of a healthy financial life.”

My take: See how easy financial education is? You just need to start early, and tell your kids about the virtues of delayed gratification! Then, when they get older, just tell them to spend less than they have! Why haven’t we been doing this already?! What’s wrong with us?@#!

What a load of crap. First of all, three of four American teens have the skills to decipher a pay stub. They might not know how to decipher it–because they’ve never had a job, or ever had to read a pay stub–but they have the skills.

Second, researchers at the University of Snarketing have concluded that researchers at the University of Cambridge do too many drugs.

Third, it would have been nice if the author of article–who has written a book titled Make Your Kid a Money Genius (Even If You’re Not) <surprise, surprise>–offered some evidence proving that “stressing the virtues” of delayed gratification and “driving home” the idea of spending less than you have actually produced any positive results when kids became adults.


Imagine that you wanted to learn how to play tennis. You go online and read articles on Tennis Magazine’s website on how to hit a topspin backhand, and the “secrets” to how the pros hit 120 mph serves. Maybe you even watch a few YouTube videos demonstrating how to hit certain strokes, and what to do in certain game situations.

When you walk out onto the court, how good a player do you think you’ll be? I’ll tell you: You’ll suck. Because no matter how much tennis-related education you read, putting it into practice is a totally different story.

It’s the same with financial education. Reading about it does not (necessarily) make you better at it.

Yet, many financial institutions–credit unions, in particular–continue to deceive themselves into believing that their efforts to post more financial education-related content on their web sites is somehow contributing to the improvement of financial literacy among their customers and members.


Speaking of content and self-deception…

As I reported in a post titled Why Content Marketing Falls Short, the author of an HBR blog post believes that:

“We are in the midst of a historic transformation for brands and companies everywhere—and it centers on content. The phenomenon of content marketing and brand publishing has unfolded rapidly because it responds to consumer preference. According to the Content Marketing Institute, 70% of people would rather learn about a company via an article than an ad.”

Arguments relying on consumers’ stated preferences rarely sway. Prove to me through testing that content marketing approaches work better than other marketing approaches, and then I’ll jump on your bandwagon.

As it applies to credit unions, Bryce Roth wrote, in an article on CU Insight:

“Content marketing is storytelling and your credit union has a story. At its very essence, content marketing is telling a story that consumers will connect with and find valuable. Instead of saying, ‘We’re for people,’ why not tell a story about something your credit union has done in the community to make it a better place to live, work or worship? Instead of saying, ‘We’re not–for-profit,’ publish a blog on your website that talks about the value and impact your credit union has made as it relates to partnerships you have established with local schools.”

Isn’t that what financial services advertising has been doing for the past 10 years? Bank of America commercials tell “stories” about how they lend to the community, making people’s “dreams come true.” TD Bank tells “stories” about how small business owners who do business with other banks get closed out of the bank at 5:01 because those mean mean banks aren’t as “convenient” as TD.

And what good does this “content” really do?

To oversimplify consumers’ decision-making process, there are a number of questions that consumers have to answer:

Who are you? -> Why should I do business with you? -> Why are your products/services better? -> Which of your products/services is right for me?

It’s never that clean and sequential, but you get the picture. The problem with Bryce’s examples is that addresses–at best–the first two questions, and not the latter two.

Here’s my assertion: The opportunity for “content marketing” to have a meaningful impact on marketing performance is by addressing the latter two questions, and not the first two. Traditional marketing approaches have taken care of the first two, but not the latter two.


What does this rant about content marketing have to do with the shortcomings of financial education?

It’s all about context.

Financial education, provided out of context–for example, when a consumer is making a financial decision–is useless.

Content marketing, done out of context–like when a consumer is trying to decide which providers’ products are better, or which of a selected provider’s products to select, and the content provided relates to “stories” how about the credit union partnered with local schools–is useless.

These two streams of thought come together when you realize that the key to improving financial literacy is providing relevant information in the right context (when consumers have a decision to make), and that the key to successful content marketing is providing relevant content in the right context (when consumers have a decision to make). 

Financial education IS content marketing. Or, at least, it should be.

If you believe financial education is posting static content on your website, and that content marketing is telling stories about your credit union, I think you will end up failing on both sides of the equation.


I could go another rant about why it’s so important to create tools that create and manage context (or what I would call activity-based marketing), but that’s probably better left for another blog post.

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