Parliamentary Replies
Published Date: 16 October 2003

Reply to PQ on Financial Education

Question No 395
Notice Paper No. 153 of 2003
For Oral Answer

Date: For Parliament Sitting on 16 October 2003

Name and Constituency of Member of Parliament
Q-395 Mrs Lim Hwee Hua, MP for Marine Parade GRC


To ask the Deputy Prime Minister and Minister for Finance, given the increasing concerns over financial agents acting on consumer's ignorance to market investment products and financial services, whether the Government has any plans to improve the financial literacy of Singaporeans and to educate them on how to better manage their financial resources, make sound investment choices and plan for their financial future.


Over the past few years, we have been progressively liberalizing the financial markets.  This has led to greater innovation in the financial services industry, with institutions offering more complex and varied products.  We have also moved away from a prescriptive approach to a disclosure-based regime.  Amid these changes, we have experienced an economic downturn and have made changes to our Central Provident Fund.

2  In this new and changing environment, Singaporeans need to become more self-reliant in their financial affairs.  They must acquire the knowledge and skills to manage their day-to-day finances, make prudent investments and plan for their longer-term needs.  They must also be equipped to exercise their rights as consumers, so that financial institutions will treat them fairly, or else lose customers.  This makes it important to educate Singaporeans to be knowledgeable in financial affairs.

3  In February this year, MAS formed a public sector committee to recommend ways to increase the effectiveness of financial education in Singapore.  Chaired by MAS, the committee comprises representatives from Ministry of Community Development and Sports (MCDS), Ministry of Education (MOE), Ministry of Manpower (MOM), Central Provident Fund Board (CPF Board) and People's Association (PA).  The committee found that over the last few years, public sector agencies such as the CPF Board and MCDS, as well as industry players, had made a significant effort in financial education.  They had produced educational guides and organized various investment seminars and workshops.  However, while resources had been put into financial education initiatives, there had not been close enough coordination, resulting in some duplication and gaps in content and reach.  The committee has therefore recommended a coordinated national financial education programme that brings together current industry and public sector initiatives.  I will share some details of this programme today.

4  The programme is called "MoneySENSE". It aims to take a more structured and comprehensive approach to increase the level and effectiveness of existing financial education programmes, and to enhance the basic financial literacy of consumers.  The MoneySENSE programme will cover three tiers of financial literacy:

  • Tier I - Basic Money Management - which covers basic money management skills such as budgeting and saving, and tips on the responsible use of credit;
  • Tier II - Financial Planning - to equip Singaporeans with the skills and knowledge to plan for their long-term financial needs; and
  • Tier III - Investment Know-How - which imparts knowledge about the different investment products and skills for investing. 

5  Over the next few months, the Committee will work closely with industry groups such as the Association of Banks in Singapore (ABS), the Financial Planning Association of Singapore (FPAS), General Insurance Association of Singapore (GIA), Investment Management Association of Singapore (IMAS), the Life Insurance Association of Singapore (LIA), and Securities Investors Association of Singapore (SIAS) to develop activities to support the national financial education programme.  The committee will also work with consumer bodies such as the Consumers' Association of Singapore (CASE) and other community organizations to ensure that consumer issues are adequately addressed through financial education.

6  Public sector agencies such as MCDS, CPF Board and People's Association will help to organise regular workshops and seminars at CDCs and other neighbourhood venues.  These will provide practical advice on how to manage money, evaluate financial products, and avoid financial scams.  MoneySENSE programmes will also be delivered to working Singaporeans and young adults through MCDS' network of almost 800 Family Life Ambassadors and institutions of higher learning.  MOE will look at ways to deliver financial literacy concepts through the economic literacy messages that are currently infused into the school curriculum.

7  MAS will be launching a new Consumer Portal on its website, which will serve as a central repository for all financial education materials including activities and events that are organized under MoneySENSE.  MAS will also be developing consumer guides to explain financial regulations or policies that impact the consumer.  These include guides on what to look out for when seeking financial advice and how to seek redress in the event of a dispute with a financial institution.  CPF Board will also be enhancing its public education programme to help Singaporeans adequately prepare for their retirement.  Ag Minister (Manpower) will share more details later.

8  To kickstart the MoneySENSE programme, the Financial Sector Development Fund will be setting aside S$1 million per year over the next 3 years to co-fund financial education initiatives.  This will provide seed money to develop the MoneySENSE programmes, and ensure a steady stream of activities in the initial years.   

9  Financial education will require a sustained effort by the public sector, the financial industry and consumers.  The "MoneySENSE" programme will launch this effort. But its success depends ultimately on individual consumers realising that he lacks financial knowledge and making the effort to seek advice and information.  Consumers should be aware that they are responsible for their own financial decisions and that it is in their own interest to have a working understanding of financial matters.  This is what self-reliance means.