In all stages of a person’s adult life, there can be times when financial education is necessary, which in turn is linked to the world of Law. To make an informed financial decision, it is not enough to have the financial knowledge and skills required to do so, but also to have some basic legal notions that facilitate the decision.
An example of the above, can be, for example, the signing of an employment contract. The legal act of signing it implies a series of obligations that makes it important not only to read it, but also to understand it.
That is why having some basic legal notions is essential in the economic-financial training of a person. The link that economics and law have had throughout history has been manifest and the communion between both disciplines is a matter that no one doubts or discusses today.
Based on the OECD definition of financial education, “a combination of financial awareness, knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve individual financial well-being”, we don’t need to conclude its reading to realise that, as it is aimed at both consumers and investors, this flow of relationships between them must be endowed, by the corresponding authorities, with a set of regulations that set out the rights and obligations of each group. Consequently, the beneficiaries of financial education cannot bypass this legal framework, as, they must acquire some basic legal notions.
From the perspective of the consumer of financial products, it is necessary to emphasize, no less significant being obvious, the importance of reading the contract that is going to be signed; to be informed of the rights that protect you as a consumer, as well as the obligations that you incur as such.
If one has an acceptable financial education accompanied by minimal legal notions, the user, when reading the document that they are about to sign, will know if the interests, commissions, expenses, validity, and other clauses that make up the contract are to be in accordance to law or not.
Today both the European Union and its member states have a huge set of regulations which ensure the legal certainty for consumers, but they cannot trust everything to institutional protectionism, it is a duty to know what is going to be signed, what you are entitled to, and what you are committing to by signing that document.
However, the parties must know the legal framework which we mentioned, and that generates transparency and trust between consumers of financial services and those agents that provide them. There would be no trust or fluidity between the parties if the framework in which relationships should develop was unknown.
Nevertheless, this financial education complemented with legal notions must undergo, in addition, a permanent evolution, since regulations are constantly promulgated, in one way or another, affecting users, and that they must know.
Likewise, financial agents make available to consumers of financial services new products, such as pension plans, deposits, insurance, investment funds, that users must know and otherwise they have the right to be informed when purchasing them (e.g., MiFID2).
As well as innovative products for users such as factoring, reverse factoring, crowdfunding, etc., all services unknown a few years ago, and that users are obliged not only to know what they consist of, but also the rights and obligations that arise from the purchasing of these new products.
Finally, the consumer of financial services must know what the channels for complaints and claims are in case they believe that their rights have been violated, and in case of ignorance, ask the financial agents for the information and / or help that they consider necessary to solve the problem which they are suffering.
Therefore, we must conclude, firstly, that financial education must be in close communion with minimal or basic legal notions; and that this economic-legal training of consumers / financial investors must be constantly and permanently updated to fulfil its purpose, and thus, to adopt the right decisions to achieve their financial well-being, as set out in the definition of financial education of the OECD with which we started this section.
