Consumer Financial Literacy Financial literacy is becoming essential to the future of the auto industry. We have seen the beginnings of a transformation in the customer?s buying behavior and expectations. It is very important for the entire industry to become more transparent with the customer to improve the customer experience; from shopping; to in store, to financing; to servicing. Financial literacy means demystifying the auto buying, financing, and ownership process for our customers. Demystifying the process can improve customer engagement/retention and reduce complaints. Learn some practical ways to help improve your customer?s financial literacy.

1. Financial Literacy
Kim Gershon
SVP, Wells Fargo Dealer Services
June 28, 2016
© 2016 Wells Fargo Bank, N.A. All rights reserved. For public use.

2. 11
Overview
 Financial literacy and its importance
 Demystifying the auto industry for the customer
 Case study
 Practical ways to make a difference
 Women and financial literacy

3. Financial
illiteracy
is being unfamiliar
with economic
concepts needed to
make sensible
savings, investment
decisions affecting
savings, retirement
planning, mortgage,
auto and other
financial decisions.
Financial
literacy
is the ability to
understand how
money works in the
world: how
someone manages
to earn or make it,
how that person
manages it, how
he/she invests it
(turn it into more)
and how that person
donates it to help
others.

4. A global financial literacy
test finds that Just 57%
of adults in U.S. are
financially literate.
By: McGrath, Maggie. Forbes.com. 11/18/2015

5. Why is this important?

6. 55
Why is it important?
 Affects the financial decisions of individual consumers
 Improves customer experience and reduces complaints
 Financial literacy varies by gender, education, income,
and experience
– Women have lower financial literacy than men
 Helps build trust with the dealership, lender, or other
organization

7. 66
Why is this important to the auto industry?
Changing consumer behavior and expectations
 Buying a vehicle is the second largest financial decision
 Changing consumer shopping behavior
– Fewer dealerships visited and fewer visits per dealership
– More online research - Better informed consumers
 Changing consumer expectations
– Want information when they want and how they want it
 Differentiate yourself from competitors
– Need to build trust

8. 77
Why is this important to the auto industry?
Regulatory and media pressure
Regulatory
 Consumer Financial Protection Bureau (CFPB) - Dealer
mark-up, advertising, with F&I products on the horizon
 Federal Trade Commission (FTC)
 Unfair, Deceptive, or Abusive Acts or Practices (UDAAP)
Media
 Reporters tend to side with the consumer
 Social media and the need for real time content
 Stories and posts reflect distrust of large banks and
dealerships

9. 88
In the News
FTC Announces sweep
against 10 auto dealers
NADA, AFSA
DISPUTE NEW
YORK TIMES
EDITORIAL ON
SUBPRIME
AUTO LOANS
CFPB – now
accepting
complaints on
consumer loans
from online
marketplace
lenders
N.Y. Times Story
on subprime
offers feds
ammunition
Mounting fears in
subprime auto lending
CFPB’s Plan to Oversee
Auto Lenders Will Have
Far-Reaching Impact

10. 99
Poll Question 1
Kahoot.it

11. 1010
We can help demystify the auto industry
 Financial literacy topics related to the auto industry
 Increase transparency
 Make the information available in multiple
formats/delivery channels
Auto buying
process
Auto finance
process
Auto
ownership
Value of
credit score
How to
build credit
How to
restore credit

12. 1111
Industry resources

13. Wells Fargo as a case study

14. 1313
Wells Fargo as a case study
 Strong commitment to all aspects of financial literacy

15. 1414
Customer surveys identify opportunities
 Redesigned customer statement
 Reviewed customer correspondence
 Changed customer service scripts to address most
common questions/concerns
 Revamped web-site
– Launched new tools
– Enhanced account information
– Added financial education section
 Created Raise Your Hand campaign

16. 1515
Financial Literacy – Online resources

17. 1616
Financial Literacy – Online resources

18. 1717
AFSA – MoneySKILL course

19. 1818
Financial Literacy – Age-based education classes

20. 1919

21. How to get started

22. 2121
Practical ways to improve literacy
 Listen to your customers
 Easy to follow instructions
 Self guided instruction and education about products,
services, processes
 Glossary of terms
 Make account information available
 Clarify process and procedures
 Ask your employees to raise their hands

23. 2222
View through the lens of the consumer
Consumer-centric focus for all areas of the business
 F&I department
 Parts department
 Sales people
 Customer service
 Business office

24. 2323
Leverage customer communication tools

25. 2424
Poll Question 2
Kahoot.it

26. 2525
Women and Financial Literacy – Auto Industry
 Hold more driver’s licenses than men
 Influence 80% of the car purchases
 Buy 65% of new tires
 Make 65% of new car purchases
 Only 17% of auto industry employees are female
 75% of women feel misunderstood
 Only 38% feel confident vs 58% of men
 According to sheconomy article on July 28, 2015 ???

27. Women and Financial Literacy

28. 2727
Women and Financial Literacy
 Drive 70-80% of all consumer purchasing
 Multiplier effect
 Salary and savings gap begins early
 More than 40% of retired women are widowed, never
married, or divorced or separated – with less assets
than married women

29. 2828
Imbalance in Retirement Savings

30. 2929
Thoughts to consider
Do we buy or
are we sold?
Are we
prepared
financially for
retirement?
Are we
self-service
learners or do
we seek advice?
Complexity
of financial
options
Do we understand
the terminology or
process before we
make decisions?

31. 3030
Poll Question 3
Kahoot.it

32. 3131
Taking the Initiative to Improve OUR Literacy
Utilize free resources available online and through local
financial programs.
• Financial Women’s Association
• The Women’s Institute for Financial Education
• The Financial Literacy Organization for Women and
Girls
• The Women’s Institute for a Secure Retirement:
wiserwomen.org
• Mymoney.gov
• Directionsforwomen.com

33. As women, it is important for us to
focus on our overall financial literacy
to help us make the best possible
decisions to improve the financial
well-being for ourselves and, when
applicable, our families.

34. 3333
Recap
 Financial literacy is important
 Our industry can help make a difference
 Tools and ideas to consider
 Importance of financial literacy to women

35. 3434
Questions?