Banks, brokerages, fund companies and third-party fund distributors are increasingly investing in improving and increasing the outreach of investor education, a recent report showed.

According to the 2023 China Residents Financial Literacy Report released on Tuesday, more than three-fourths of Chinese respondents preferred online channels for obtaining financial knowledge, with 43.2 percent choosing the official social media accounts of financial institutions and 23.8 percent choosing financial media as the most commonly used channel.

As many as 90.1 percent dedicated less than 60 minutes to such study per sitting and most have clear preferences for the format of financial education, said the report, jointly released by Shanghai Jiaotong University's Shanghai Advanced Institute of Finance, and Charles Schwab, a provider of financial services.

Many financial institutions have started to recognize the positive impact of investor education on both investor behavior and business development, it said, suggesting that financial institutions enhance public engagement in financial education by tailoring education content and strategies to these needs.

"Targeted financial education that helps investors to build correct understandings of the financial market and better achieve their financial goals has the effect of improving the quality of financial services from the demand side, which, in turn, has far-reaching impact on the development of financial institutions and the capital market," said Thomas Pixley, general manager of Charles Schwab (Shanghai).

"We look forward to working with all parties to create a financial education model that meets the needs of the Chinese people, thereby elevating their financial literacy and well-being."

The report said respondents this year achieved an overall average financial literacy score of 68.7 out of 100 in the survey, higher than 64.4 last year, with uneven distribution across different demographic regions.

As financial education for the oldest and youngest groups still lags behind compared to the rest, the report suggests efforts must be made in enhancing younger and older people's financial literacy and safety through schools and local communities to strengthen their understanding of the financial market and avoid falling victim to financial fraud.

Financial literacy enhancement can increase people's awareness of, and engagement with, modern wealth management, it said.

For example, respondents with higher financial literacy are more likely to supplement their retirement needs through diverse channels such as business annuities and long-term investments in mutual funds. They also have a more accurate understanding of professional investment advisory and display a higher willingness to pay for such services.

"The ultimate goal of financial literacy education is to help people apply the knowledge learnt to real-life scenarios and improve their wealth management practice," said Wu Fei, a professor and project leader at the institute.

"Educational institutions can fully leverage their strengths and work together with regulators and financial services institutions to comprehensively enhance people's financial literacy through knowledge education and practical skill training."

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