| 17 November 2009

Just one day after the SEC an FINRA announced they would swoop down on a few elementary schools this Friday to dole out some financial smarts, Charles Schwab (SCHW) has announced that it has revamped its own educational effort.

We took issue, sort of, with the lack of financial literacy education in the U.S. So we're glad to see the launch of Schwab MoneyWise, a cross-generational effort lead by Carrie Schwab Pomerantz to promote financial literacy and offer tools and commentary. (The effort is actually a revamp of "Money Mentoring," a site Schwab launched in 2007.)

The site covers categories such as saving and spending, life events like changing jobs or getting married, news, calculators and tools. There's also a section specifically targeting kids and another to help teachers generate financially focused lesson plans.

What does all this have to do with brokers, you might ask? Several things, actually. First, it is interesting to note that the effort is led by and funded by a broker and we commend Schwab for the committment. True, companies like TD Ameritrade (AMTD) and optionsXpress (OXPS) recently purchased education companies. But those efforts have focused on trading education and, let's be honest, do more to help generate additional leads and revenues for those brokers than to enhance our undersanding of trading and household finances.

We'd like to see more out of brokers to promote financial literacy. Why? The effort by Schwab to extend its reach into cross-generational financial literacy reminds us that we can't trade our way out of a financial bind. While it's true some active investors are working with substantial portfolios there are many others who are trading with smaller dollar amounts in hopes of propping up a nest egg that doesn't exist. This is a hopeful strategy -- one that rarely yields the intended results. It's time to start recognizing that you shouldn't trade unless you have your financial house in order.

The site also made us aware of the National Standards for Financial Literacy, a set of standards created by the Jump$tart coalition. While not compulsory in our public education system we found the standards thorough and helpful and commend J$ for a quality approach. We can only hope that more and more teachers embrace the effort and devote some time to teaching financial literacy.