Actualidad Chile

Financial education guidelines

Circular 4-2017

On 3 November, the Banking & Financial Institutions Authority, the SBIF, published Circular 4-2017 setting out the general guidelines for financial education.

The principles and guidelines in the circular are not obligatory, but serve as a template for the financial education initiatives and programs being developed by the institutions supervised by the SBIF.

These guiding principles, which follow international best practice papers, are:

  • The utility principle: the need to provide tools that increase society’s economic welfare
  • The opportunity principle: implementing these programs at times when the learnings will be used, that is, at moments when a decision is about to be made
  • The principle of transparency: by virtue of which the information provided must be straightforward and accessible
  • The principle of impartiality: this implies a key differentiation from sales advice, given that it provides not only the advantages and benefits of a financial product or service, but also the risks and obligations that come with it
  • The principle of quality: the content of programs must take into consideration the context in which they are carried out and should be imparted by people with the appropriate training and experience to accomplish the task

The guidelines on the initiatives and programs include the following points:

Overarching guidelines:

  • Simple language that is adapted to the target audience.
  • They should be made to measure and cover both the benefits and the risks involved in taking financial decisions
  • They are independent from the institution’s marketing activities, so the use of the institution’s logos and brands is forbidden
  • The trainers should have the appropriate experience and skillsets that are kept up to date
  • Participation in these initiatives and programs is voluntary and the resulting data bases may not be used for commercial purposes
  • Initiatives and programs carried out in teaching centers are conducted under the authority of a teacher at this center

Guidelines on contents: focused on subjects relating to handling money and economic welfare. Among these:

  • Saving and investment
  • Planning and family budgeting
  • Responsible levels of indebtedness
  • Financial products

Guidelines for planning, monitoring and assessing financial education initiatives and/or programs:

  • Based on a diagnosis justifying their need that forms the starting point for determining the target, design and assessment mechanisms
  • Carried out by a third party that is unconnected to the initiative or program to ensure objectivity.
  • Rolling assessments that provide information about their effectiveness and focus on acquiring financial skills, changing attitudes that are unhelpful in financial scenarios, on measuring learned behaviors and on the opinion of participants to review the efficiency and effectiveness of the initiative or program.

Finally, the regulation recommends that institutions running these types of initiatives and programs should send information about the previous year by 10th January, filled in according to the template provided in the appendix to the Circular.