Investment Project Targets Underserved
Now that it has some tangible evidence from a nearly year-old project that provided training to credit union employees on investment education, the Wisconsin Credit Union League is gearing up to reach the poor and underserved.
Launched in October 2009, the "REAL Progress and Pathways to Prosperity," or RP3 project, engaged participants in approximately 10 hours of online learning about investing concepts. including setting goals, distinguishing among investment vehicles, managing risk, diversifying a portfolio, maximizing tax advantages, understanding mutual funds and working with investment professionals. More than 30,000 hours of online investor education was completed by 3,520 employees at 80 Wisconsin CUs.
The next phase of RP3 targets what some consider the least likely investors: the financially underserved and low-wealth individuals. In July, up to 25 Wisconsin CU employees can apply to enroll in 50 additional hours of online investor training this fall. Graduates will earn a certified financial educator designation valued at $1,700, according to the league. Each of these grads will then train at least 200 financially underserved or low-wealth individuals so they can turn modest contributions to investment accounts into significant assets.
For some, investing for the long term may take a back seat to more short term necessities such as buying groceries and paying bills. The additional RP3 training will focus on the basics such as the importance of creating a budget and having a savings account where one can set up automatic deposits as small as $20, said Jill Weber, director of member solutions at the Wisconsin league. The concept of compounding interest and the importance of an emergency fund are other topics.
"Modest wage earners often mistakenly believe that they can't ever get ahead because they feel they have too few dollars to invest. That's one of many fallacies our training corrects. Every person with income, no matter how modest, can secure a solid financial future through investing," said Brett Thompson, president/CEO of the Wisconsin league.
Younger employees who don't have a savings in place are also prime candidates, said Jim Drogue, vice president of credit union development at the league. With all the groups in RP3's next phase, one of the goals is to work closely with CU select employee groups and other entities within their fields of membership to connect through things like brown bag lunch meetings and after-hours gatherings.
The advanced investment training phase of RP3, like the initial phase, is being conducted in partnership with the Puelicher Center for Banking Education at the Wisconsin School of Business, the University of Wisconsin-Madison, Precision Information, the Wisconsin league, Gov. Doyle's Council on Financial Literacy and the Wisconsin Department of Financial Institutions. Funding for the latest phase includes a $15,000 grant from the National Credit Union Foundation and a $53,000 grant from the Investor Protection Trust, a nonprofit organization that has worked with states to provide independent investor education.
All are hoping to build on the momentum from RP3's first training sessions. In December, 1,623 employees from 53 CUs completed investor education courses and achieved an average grade of 88.17%, according to the league. Their knowledge of investing concepts?determined by comparing a pre-test to a post-test following completion of the coursework?had increased 28.27%. In January, another 1,897 employees from 56 credit unions began the coursework. Upon completion of their studies in April, that group achieved an average passing grade of 87.69% and improved their knowledge by an average of 23.31%.