Exchanges must play a pivotal role in raising financial awareness

By: Ittai Ben-Zeev, Chief Executive Officer, Tel Aviv Stock Exchange Oct 2021

Our financial and economic habits have a tremendous effect on our standard and quality of living, and yet the State of Israel dedicates little to no resources to financial education. While it is commonly agreed that financial know-how should be a part of our basic skill set, Israeli schoolchildren and students – and even adults – are unfamiliar with basic terms in savings, finance management and healthy financial practices.

The public is aware of its ignorance. A dedicated study for the analysis and mapping of trading barriers was conducted by TASE in 2019 shows that the Israeli public’s involvement in the capital market is inhibited by emotional and rational barriers. The most notable emotional barrier was the sense of apprehension and uncertainty. The predominant rational barrier was the perception that basic understanding is a minimum prerequisite for any investment in the capital market.

These barriers stand in strong contradiction to the transparent, diverse, liquid, and supervised nature of investing on TASE, particularly in comparison with more common alternative channels of investment, primarily real estate. According to the study, the public believes that the long-term return on TASE is higher than the return available in other kinds of investment, but is often deterred from capital market investments as a result of these emotional and rational barriers.

A complex challenge

In order to counteract those barriers, in recent years TASE has been working diligently to make capital market financial information and education accessible to the public so that the Israeli public can enjoy and be part of the success of local companies and the Israeli economy.

TASE is confronting this complex challenge and effecting change by using a variety of channels and tools suited to different target audiences, ranging from the creation of foundations for know-how, via eye-catching campaigns that raise awareness and encourage the public to learn more, through to dedicated events and activities.

Three years ago, TASE launched a dedicated website for the novice investor, giving the public easy access to the basic terms of the capital market, including a simplified FAQ page, a calculator of the periodic yields of TASE indices, and more.

Additionally, TASE has placed on its app and website a free commissions calculator, offering a straightforward comparison between the banks and investment houses. With these initiatives, TASE aims to encourage more private investors to make smarter and more informed choices, thereby gaining better quality services at lower costs.

To make real-time data more readily available to the public and to private investors, TASE has reduced the commissions on the information packages that are designated for these groups and is planning to reduce the cost of the current data package for small investors with an investment portfolio value of less than NIS25,000 (US$7,750) to a token amount of NIS1 per month, 75% below the existing price.

Widening reach

TASE also entered into a three-year sponsorship agreement with the Israeli Professional Football Leagues to better reach new and diverse groups through its association with this strong and popular brand. The purpose of this move was to raise public awareness of the significant role TASE plays in the Israeli economy, while supporting Israeli football. As part of this collaboration, football players are offered a financial education programme that focuses on securing their financial future, taking into consideration their relatively short careers.

As part of a successful initiative launched several years ago, TASE also holds economic and social seminars for women as a way of enhancing economic and financial know-how and boosting their involvement in current economic and social affairs. Participation in the seminars requires no previous knowledge and focuses on current trends and developments in economics and finance. Each seminar has hosted close to 300 women of all ages, who were eager to learn more about financial management.

TASE has significantly increased its presence and work in social media, with emphasis on enhancing the accessibility of information and content concerning TASE’s products in an inviting and straightforward manner, using numerous videos, events, meetups, and friendly visuals.

Bearing fruit

In the past two years, our efforts have begun to bear fruit. Another factor that has contributed to the public’s greater focus on studying and investing in the capital market was the outbreak of the coronavirus and the ensuing lockdown in March 2020, during which the number of trading accounts increased significantly by 141,000 new accounts. 

In March 2020, the number of new securities accounts on TASE reached 21,000, a record high. The number of new accounts continued to grow in the first half of 2021, with a surge of 180%.

The public is thirsty for reliable and objective financial information, and we can see more and more investors relying on TASE for this. Our official website is slowly but surely becoming a go-to source for learning and information.

We still have a long road ahead but nevertheless, TASE is committed to strengthening its ties with the public and increasing the public’s involvement and participation in the success of the Israeli economy through the capital market. We believe TASE has a pivotal role that requires and allows us to reach out to the public and raise awareness about financial content.

It will benefit us all.