Tufano, Peter. "Putting Consumers Back Into Finance." Presentation to the Value of Values conference, Santa Clara University, May 14, 2010.
Presentation slides here.


(Rough notes by Lloyd Kurtz, I apologize for inaccuracies or errors of emphasis. - lk)

Although not strictly a social investment topic, Peter Tufano’s talk on consumer saving was very well received. Tufano is an important financial thinker (two of the papers presented Saturday relied heavily on his theoretical work), but this presentation focused on his efforts to create savings products and online financial education tools at his non-profit, Doorways to Dreams.
  • His motivating question - “how can we re-inject consumers into finance (and business schools)?... Invest as if people mattered... Run businesses as if people mattered...”
  • Americans are not smart about money, and that’s important because the household sector controls $68 trillion. By contrast, all corporate debt totals $7 trillion. But retirement savings are low compared with future needs ($12 trillion – “woefully inadequate”) and about ½ of Americans say they could not come up with $2,000 quickly if they needed it. These problems are pervasive: “this is not about poor people.”
  • As people move into retirement, he warned, they are forced into complex deinvestment decisions just as they approach their lowest level of competence/cognition, but while they are simultaneously at a high level of (over)confidence.
  • He showcased various cool savings products and educational online games that had been designed by his organization using behavioral principles. One way to get people to save, he pointed out, is to get them to focus on others: “almost no one gives up hope on their kids.”