The words above are attributed to Emil Faber, the fictional founder of the fictional institute of higher learning, Faber College, in the 1970’s movie classic, Animal House. While there may be other lines of the movie that come to mind (“Was it over when the Germans bombed Pearl Harbor?”), we are going to focus on the above as it applies to financial illiteracy.

Financial illiteracy is a big problem in America and it has huge ramifications for us as financial advisors. Various studies have found that investors lack basic financial literacy and have a weak grasp of elementary financial concepts. As a country, we are in the middle of the pack when it comes to understanding basic finances.

There are a number of reasons for this problem. The first is a lack of formal education. Historically, there has been very little attention given to financial education in this country and financial ignorance is being passed from one generation to the next. We’ve said to our own children, somewhat facetiously, that you should not be allowed to graduate high school unless you’ve passed both a finance course and a civics course so you know how the world works. And knowing how the financial and political worlds work is probably more important than knowing who dies in Macbeth.

Another reason for the problem is that becoming financially literate requires mastering a range of technical information that is boring, uninteresting and inaccessible to most people, except of course, us. The financial advisory industry has done little to solve this problem and the use of jargon and complex concepts only worsens the problem.

A final reason is that by our nature, we are not wired to be good savers or investors. This is both a major societal problem and a very practical problem for us as financial advisors. If people don’t learn to save and invest properly, they won’t have sufficient resources to retire or achieve other financial goals. Most financial advisors, us included, will say one of their biggest challenges is getting clients to do the right thing. There is a gap between what a client needs to do and what they are comfortable doing. Client-investors tend to worry about risk only when markets are trending downward.

As financial advisors, we have the responsibility for helping to close that client-perception gap and financial education is a good start. Clients who understand more about investing, markets and how to behave in order to maximize success can make better decisions. If they understand the situation and what they need to do about it, they can handle more risk.

The answer isn’t for financial advisors to provide their clients more information; it’s to provide better information. There is plenty of information available in various forms for client-investors to use. And more information sometimes adds to the problem instead of helping to solve it.

As advisors our first job is to listen. And then our job is to provide answers; most of those answers will be in the form of information. That information must be clear and concise. It must be accessible, digestible and credible. It helps if it’s fun and interesting (like these articles!). While we are proficient at financial concepts and investing strategies, we are also skilled at behavioral finance. One part of our brand promise is that we take the emotions out of investing. That means having a plan and sticking to it, even in the times when it may not be working.

We encourage you to ask us questions and hold us to our commitment to provide useful and pertinent information and education.

By the way, according to, King Duncan, Banquo, Lady Macduff, Lady Macbeth and, of course, Macbeth among others all die in Macbeth. Just in case you were wondering.