Suite 201 1600 K Street Washington, D.C. 20036 Voice: 202.449.6340 800.322.4237 Fax: 202.449.6350 E-mail: email@example.com Web site: www.fpanet.org March 7, 2008 Honorable Andrew Romanoff Speaker of the House Colorado State Capitol 200 East Colfax, Room 271 Denver, Colorado 80203 Re: Support for House Bill 08-1168, Concerning Financial Literacy Dear Speaker Romanoff: The Financial Planning Association1 ("FPA") is pleased to join the FPA of Colorado in support of House Bill 08-1168, a proposal to add financial literacy standards to mathematics courses for public school students in Colorado. Financial illiteracy is one of the most critical problems facing our generation, not only for school-age students, but for the vast majority of adults. A host of studies confirm this problem, but to see the real effects on society, one only has to look at the spiraling credit card debt of college students and subprime lending practices that have led to widespread foreclosures around the country. Although the federal and state governments are looking at short-term assistance for distressed homeowners, the seeds of a long-term solution are truly contained in House Bill 1168. This legislation would apply basic math concepts to personal finance by addressing, among other things, the practical problems associated with household budgeting and cash flow. Working knowledge in these two areas alone would have avoided many of the problems now generating headlines today. By taking positive action on HB 1168, the Colorado General Assembly would join a number of other states that have recently passed financial literacy requirements. Its neighbors to the immediate west and east recently adopted financial literacy standards through somewhat different approaches. Utah, for example, is requiring high school students to take a stand-alone semester 1 The Financial Planning Association is the largest organization in the United States representing financial planners and affiliated firms. Most of FPA's 28,000 members are affiliated with investment adviser firms registered with the Securities and Exchange Commission, state securities administrators, or both. FPA is incorporated in Washington, D.C. where it maintains an advocacy office, with headquarters in Denver, Colorado. Honorable Andrew Romanoff March 7, 2008 Page 2 course on personal finance in order to graduate, beginning with the 2009-2010 senior class. Kansas, along with 13 other states, requires personal finance incorporated into other course topics, typically math or economics, and similar to the approach taken by this legislation.2 FPA prefers the more comprehensive, stand-alone course requirement, which allows schools to cover more of the critical topics that will face students in the real world. However, we believe that HB 1168 is an important first-step. Financial literacy requirements would help more than just students. Financial planners, while acting as advisors to individuals and family households, by necessity serve as educators in helping guide their clients through the increasingly complex labyrinth of money issues. Solid financial advice serves no useful purpose unless the client understands and is motivated to act on the recommendations. Clients who thereby appreciate the wise use and long-term management of financial resources make it much easier for financial planners to help them attain life goals. From a public policy perspective, legislation such as HB 1168 also is important for those who prefer to do it on their own or cannot afford professional assistance. In particular, strong financial literacy standards over time will strengthen the fabric of society by helping the underserved cope successfully with financial challenges and reduce the strain on government and charity safety nets. For all of these reasons, FPA wishes to reiterate its strong support for this important step in creating a financial literacy standard in Colorado. We would be happy to discuss these issues with you in further detail if you have any questions or comments. I can be reached at 202-449-6341 or firstname.lastname@example.org. Very truly yours, Duane Thompson Managing Director, Washington Office 2 See Jump$tart Coalition for Financial Literacy Standards, “State Financial Education Requirements,” at http://www.jumpstart.org/state_legislation/index.cfm.
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