We already know that the UK has a strong contingent of execution-only traders, complemented by cutting-edge trade execution platforms. This area of investment has been particularly strong in recent times, with further growth expected in the longer term. Could plans to tackle literacy problems in the UK give this trend an additional boost?
Compulsory maths
It may surprise many people that maths is not compulsory between the ages of 16 and 18 in UK education. However, numeracy skills are a crucial element in relation to any investment and especially nimble footed execution-onlytraders. The ability to make quick calculations in your head can significantly impact trade execution timing and ultimate returns. Is the situation as bad as the government suggests?
Numeracy skills
Currently, around 8 million adults in England have numeracy skills equivalent to primary school children. Only half of those aged between 16 and 19, in higher education, study any form of maths. For disadvantaged pupils, it is estimated that 60% will leave school at 16 with no basic maths skills. So, while the UK has one of the world's largest and most influential stock markets, with a growing element of execution-only traders, many students today are unlikely to achieve their full potential in this area.
Investment awareness
Whether you are a short-term execution-only trader or looking to position your pension fund for long-term returns,understanding figures will enhance your investment awareness. While pressing that button to confirm trade execution is the final piece of the jigsaw, there is much more going on behind-the-scenes. All investors need a degree of numeracy to allow them to compare and contrast figures, project forward and, with experience, think on their feet.
An experienced execution-only trader may make the process look relatively simple, but their minds are programmed to think and operate in a certain way. When we talk of trade execution, we're looking at the buying and selling of shares and long-term pension arrangements. Again, the UK has an enormous financial services sector and numerous areas where advice is compulsory. First, however, individuals must have a basic understanding of investment products.
Is this the next step towards financial literacy?
While this article focuses on various types of stock market investment, execution-only traders and the timing of trade execution, financial literacy is a much broader subject. The hope is that improving maths/numeracy skills amongst teenagers will help them better understand basic finances. As we touched on above, while the UK has one of the largest financial services sectors in the world, with advice available across a broad range of subjects, it is vital individuals have a basic understanding.
There are hopes that the introduction of maths up to 18 is just the first stage of overhauling the UK education system. However, it is not so much a case that the education system has let people down, but the system has failed to adapt to the modern era.
The modern era
While execution-only services have been around for many years, the Internet has taken user numbers to a different level. It is now possible to trade on global markets from the comfort of your home, even on your mobile phone. We have also seen considerable improvements in trade execution speeds, with low-latency trading platforms now commonplace. There is evident curiosity amongst tech-savvy young adults; therefore, it is essential that they have a foundation in maths/numeracy.
In recent years we have seen a raft of regulations givingindividuals greater control over personal finances, yet many appear unprepared. Is this about to change?