Going back to basics

Financial education has been gaining traction, with Jesmond Mizzi, Managing Director of Jesmond Mizzi Financial Advisors (above photo: Jean Marc Zerafa), outlining to Investi the various initiatives being undertaken and pointing to the need to go into schools with a basic message to capture the new generation.

As an advocate of financial education for many years, Jesmond Mizzi is seeing the focus change from the investment side – where to invest my money – to reaching a whole new generation that is still at school. “We need to go back to basics: How do I spend my money? How much should I spend? How do I budget? How do I plan for the future and my pension?”

This may have been the message of money coaches and educators, which should have started a long time ago but, he affirmed, “we need government to lead the way into schools alongside the private sector”.

EU-wide initiative

Financial education is a European Union-wide initiative, with various local institutions, including the Malta Financial Services Authority (MFSA), FinanceMalta, the Malta Stock Exchange (MSE) and the Malta Financial Services Advisory Council (MFSAC), getting on board in the past two years. “This year, however,” Mr Mizzi said, “it has started to gather a certain momentum.”

Mr Mizzi has been communicating about the capital markets across various media for many years, including on television, in the print media and now as a contributor to the Investi website. “We want to continue to take care also of the local investing public from our end both to ensure that investors who are already in the local market particularly know what’s coming, what companies are announcing and all that might impact their investments, but also to try to reach a wider audience,” he said.

“We know that there is still too much money sitting in bank accounts. I think we need to get that to work – this is again a European issue. We need first to get them to invest and then to invest well.”

Diversification is essential

There is great support for local entities wishing to raise funds in Malta, Mr Mizzi said. “The amount of bond issues was strong last year and it continues to be strong this year. The risk profile remains key. But he feels the need, even at European level, to diversify away from just investing in bonds.

“Within equities, even more so, diversification is essential. It’s true that the younger generation is investing through easy methods and use digital platforms, both local and international. However, it is essential to get the right mix,” he said.

He has seen from experience that even investors on these digital platforms come to a stage in life when they seek independent financial advice. “Going forward, there will be a great mix of people investing on their own and those investing via financial advisors, with a strong global bias,” he said.

“I think we’re fine with investing in bonds, new issues and government bonds. There we don’t have an issue. Where we continue to have an issue is the lower volumes on the local equity side where we are competing with the very big names internationally. For youngsters, it is not there. They are keen on big international names which have performed very well in recent years. So we need to get them interested in the local equity markets by providing information about local companies, as Investi.com.mt is now providing as well.”

This article does not intend to give investment advice and the contents therein should not be construed as such. The products/services referred to in this document may not be suitable for every investor. The directors or related parties, including the company and their clients, are likely to have an interest in securities mentioned in this article. Investors should remember that past performance is no guarantee of future performance, and the value of investments may go down as well as up. Jesmond Mizzi Financial Advisors is licensed to conduct investment services under the Investment Services Act by the MFSA and is a Member of the Malta Stock Exchange.