In 1993, Tucker Anthony rep Harvey Luft spoke to a roomful of bright, eager junior high students at Weston (Conn.) Middle School's Career Day. He explained what brokers do, how the stock market works and what a bull market is to the group of 13-year-olds.

Fast forward to May 2001. The Stamford, Conn.-based rep is buying a quart of milk on the way home from work. The young man behind the checkout stand rings up Luft's purchase and, just before handing Luft his change, he says, “You're Mr. Luft. You spoke to my eighth-grade class eight years ago. It was well done. I enjoyed your presentation. I just graduated from Dartmouth. I'm entering PaineWebber's broker-training program in the fall. You changed my life.”

Luft collected his change, thanked the young man for the compliment and wished him well.

That's a true story.

Here's another truth: Stockbrokers can make a huge impact in America's classrooms. Their knowledge of the financial services business gives reps the opportunity to teach a subject that is largely ignored in the typical school curriculum.

In fact, only three states require students to complete a course in personal finance to graduate high school. A fall 2000 survey, conducted by the National Endowment for Financial Education, reveals that U.S. high school seniors average 52% on a multiple-choice test dealing with personal finance and money matters.

Clearly, there is a long way to go to making the younger generation financially literate. And some reps have voluntarily taken up the mantle of teacher. They say it's good for the community and makes them feel good, too.

Embracing the Instructor Role

“I try to teach kids things parents or teachers don't or won't,” says Ray Jensen, a broker at Raymond James Financial Services in Louisville, Ohio. He's been leading a course on the stock market for high schoolers in Louisville off and on since 1989. His 12-session class is a reality-based, unscripted course that teaches teens the nuts and bolts of stocks, bonds and mutual funds.

“I actually get chills on my spine from the reaction of the students.”
Meg Greer, Smith Barney

“I try to stress the how and why of the stock market as well as important things they're going to have to learn in life,” Jensen says. “We cover why things cost what they do, the value of a dollar and the importance of saving.”

Jensen notes that today's kids are more familiar with money-oriented topics, but still lack real understanding. “Thanks to the media, the kids have the information,” he says. “I try to give them knowledge.”

While teaching his own children about investing, Arty Podnos, a Smith Barney rep in Short Hills, N.J., noticed that their friends liked listening and learning about the subject, too. One was the child of a teacher. Not long after that, a school district official approached Podnos and asked him to speak on finances and at Career Days for area schools.

For the past 10 years, Podnos has spoken to students of all ages and grade levels. He relishes the opportunity to enlighten children. “If someone would have shown me what the market was all about when I was young, I would've been a more astute investor,” he says. “The business pages were strange for me, a foreign language. I can see now kids are reading and understanding finances.”

Quashing Gender Stereotypes

The conventional perception is that when dealing with finances, numbers and figures, boys will excel. But reps report that thinking is far from reality.

Jensen says three girls in his high school class managed a fictitious $10,000 portfolio that outperformed some Wall Street money manager picks. The girls' fourth quarter 2000 picks were up 35%. (Their secret: Buy and never sell.)

And Meg Greer, a Smith Barney rep in Boston, also ensures that finance is a woman's province. In conjunction with the Girl Scouts, Greer conducts courses for girls in a camp setting. She uses annual reports, nonproprietary firm research, general math exams, a live auction and an investing game she created to interest young women in the stock market and finance.

Cultivating an understanding of money issues in a safe environment helps girls take to the subject, Greer says. “Girls seem freer to discuss things, give their opinion and ask questions in an all-girl group,” she says.

Remembering Simple Lessons

Brokers emphasize that practical issues grab the kids' attention and hold it best. They skip esoteric discussions of Fed policy and go for real-life explanations of money.

Luft gears his class specifically toward 15-year-olds. “Finances may be too theoretical for someone younger,” he says. “But goals, planning, investments, pay stubs and taxes are important to 15-year-olds. They want to buy a car for their next birthday.”

In fact, an April 2000 Merrill Lynch survey found that 30% of teens saving money were doing so to buy a car. Forty-two percent were saving for college.

Lynn Rasko, a rep at Morgan Stanley in Westlake, Ohio, builds her lectures to junior high kids around the national Stock Market Game. As part of that, she makes it a priority to dispel myths. “Today, students get advice on what we call ‘cocktail stocks’ — a stock you hear about from someone — and that's no way to build a portfolio. I try to teach them to analyze decisions before they make them,” she says.

“Goals, planning, investments, pay stubs and taxes are important to 15-year-olds.”
Harvey Luft, Tucker Anthony

Podnos sees early financial education as practical preparation for later on. “We're giving kids knowledge so they can be better at finances,” he says. “Even if they earn a lot as adults, I hope we're making them better at managing it.”

Luft agrees: “We're trying to empower the child to make the right decisions. We're teaching them life skills.”

Since the discussions are real, most reps don't stick to a script. Jensen offers a free-form class. “A quarterback on the football team asked, ‘What happens to our money if our parents die?’” Jensen remembers. “The lecture that day became one about estate taxes.”

Reaping Rewards

Rasko and others say that sometimes a parent or grandparent will become a client because of the broker's contact with the child. But it's rare — and not the point.

“That's strictly icing on the cake,” Rasko says. “I'll never tell a young broker, ‘You should do this to build your book.’ The reason I do this is because there is a need for children to learn about investing.”

“We're giving kids knowledge so they can be better at finances.”
Arty Podnos, Smith Barney

The rewards for broker-teachers are less tangible and perhaps more meaningful. “I actually get chills on my spine from the reaction of the students,” Greer says. “They are so grateful to be learning something that is important. And I think they can tell I care about them.”

Adds Jensen: “There is some personal satisfaction when you see the light come on. You feel like you're really making a difference.”

And, occasionally, a broker makes a real connection. Like Luft's Dartmouth grad turned broker trainee. Or Jensen's intern. A female student showed a keen interest in Jensen's high school class three years ago. She is now a finance student at Akron University and an intern at a brokerage in Ohio.

“Every year I get a card of thanks from her parents,” Jensen says. “Now I know how a coach feels when one of his players makes it to the NFL.”

So You Want to Teach?

If you are interested in helping children develop financial literacy but lack formal training as an educator, don't despair. Most reps don't create rigid course outlines and instead let class discussion direct the content.

Advises Arty Podnos, a Smith Barney rep in Short Hills, N.J., “Be ready for any kind of question and have a sense of humor.” However, if you want to go into the classroom with more than that, here are a few resources:

Your Firm — Check your company first. Some wirehouses provide colorful, kid-friendly materials in an effort to educate young investors.

For example, Merrill Lynch offers a “Financial Education” button on its Web site at http://askmerrill.ml.com. Merrill also offers age-appropriate kits, guides, comic books, and a “Time to Save” video and brochure series.

In June, Smith Barney relaunched its Web site geared to teaching finances to kids. The Young Investors Network can be found at www.younginvestorsnetwork.com. The site features sections for parents, students and teachers. An instructional workbook is also available.

Nonprofit Groups — The National Endowment for Financial Education (NEFE) provides classroom material as part of the High School Financial Planning Program, which exposes teens to financial information and money management skills. The organization encourages financial advisers to team with teachers to present the lessons. Contact the NEFE High School Financial Planning Program at 303/224-3510 or see www.nefe.org.

The Stock Market Game, sponsored by the Securities Industry Foundation for Economic Education, is a nationwide program in which students invest a fictitious $100,000 portfolio. Financial professionals can get involved in the game's “Brokers in the Classroom” component. Call 212/608-1500 or visit www.stockmarketgame.com for information.

Before stepping foot in the classroom, expect to discuss your lesson plans, class materials, handouts and class format with school officials.
T.N.

Registered Representative welcomes your comments on this story. Contact Editor in Chief Dan Jamieson at djamieson@intertec.com or call our editorial department at 800/621-0720.