Financial Literacy Hits the SEC’s Investor Advisory Committee Agenda

From human capital metrics to climate, the Securities and Exchange Commission (SEC) continues to expand its purview into unexpected areas. In a draft released earlier this month, the SEC’s Investor Advisory Committee (IAC) recommended that the Commission address financial literacy as it applies to “investors with limited knowledge.” 

“Well-informed and educated investors are better equipped to navigate the complexities of the securities markets, understand the benefits and risks associated with various investment products, and discern between legitimate opportunities and fraudulent activities,” the draft said.

Calls for funding: The IAC’s draft recommendation includes increased funding and staffing for investor education at the SEC to support its financial education efforts. The recommendation proposes partnerships with the DOL to encourage employers to offer education around retirement savings and advocacy with the Department of Education for federal funding of high school financial literacy courses. 

The big picture: Many employers have been in the financial wellness game for quite some time and taken a proactive approach to encourage 401(k) savings and retirement readiness. HR Policy Association has a long-standing history of urging legislators to implement policies that prioritize affordability, adoption and accessibility to encourage positive retirement outcomes. 

HRPA’s retirement policy recommendations: As part of our new series, Advancing the American Workforce, the Association interviewed Total Rewards leaders and industry experts to identify the obstacles to 401(k) participation and offer six concrete policy recommendations for lawmakers, including continue to develop tax policies that support employer contributions, increase limits for retirement-linked emergency savings, and create a national financial literacy curriculum.  

Our take: While the goal of improving financial literacy is sound, certain recommendations to the SEC Commission such as creating an SEC mascot to “spread the word on social media” and developing campaigns to combat TikTok “finfluencers,” are untested.  

The IAC also pitched on regulating AI:  Creating Future Us, a U.K. sustainability non-profit, suggested that the SEC join the pack of regulators eyeing AI and provide oversight on two fronts: AI technology itself and use-case outcomes.   

HR Policy is actively educating policymakers on legitimate uses for AI and the need to fully evaluate existing regulations before enacting new ones. Our guide, Public Policy on Workplace AI , outlines existing and pending laws across the globe and includes our comments supporting the adoption of voluntary principles for AI’s ethical and responsible use.