We’re all in the education business, no matter what our product is.

That is to say, our clients need to be continually taught the reasons for doing business with us. That’s the powerful reminder about selling from Robert G. Allen, a long-time investment advisor and author of several best-selling books on building wealth.

For those of us in the business of selling insurance and financial services, I find greater significance in Allen’s message. Yes, we need to always educate clients about features, benefits or what’s new and what’s improved. But if we are really in the education business and helping to make clients smarter about financial matters, then we’re also creating a more financially literate–and stronger–America.

Think that’s a bit of an overstatement? This year, Northwestern Mutual completed a study which concluded that those who work with a financial professional demonstrate greater financial knowledge than those who do not.

This past spring, Ben Bernanke, chairman of the Federal Reserve, provided testimony in Washington about the importance of financial literacy, “both as a source of better decision-making by consumers and as a means of improving the functioning of financial markets.”

In his testimony, Bernanke cited new research that looked at the link between financial knowledge and broader financial management skills. One study he referred to has determined that financial knowledge is the best single predictor of behaviors, such as budgeting, saving, and shopping responsibly, all of which translate into positive outcomes on credit bureau reports.

The Northwestern Mutual study examined how much the general population knows about subjects that compose a financial strategy: saving and investing, risk and protection, and retirement. Regarding the use of financial professionals, the study found that individuals who use the aid of an advisor tend to be more likely than those who make decisions on their own to have a greater financial “IQ.” Likewise, the study found that Americans who have an advisor are more likely to have short- and long-term savings goals than those who plan by themselves.

The Northwestern Mutual study further revealed that only a quarter of Americans work with a financial advisor, and Americans as a group score the equivalent of failing grades when it comes to their grasp of important financial matters like:

? The best long-term protection against inflation and other adverse market conditions (surprisingly, more Americans erroneously pick bonds over stocks).

? The insurance impact of leaving a job (most wrongly believe they will be able to take their group life or disability policies with them).

? The real costs of nursing-home care (most underestimate and fail to protect against these costs).

? The purpose of 529 plans (fewer than half know these are for education funding).

? The concept of index funds (less than 1 in 4 understand the concept of mutual funds that mirror market indexes).

Infinite opportunities to educate

Every time a financial professional has contact with a client, there exists an opportunity to educate him or her about matters like these and lots more. Indeed, like any good education, the subject matter can range from the simple to the complex, from the practical to the theoretical.

One easy lesson is to show a client how to organize a financial strategy into 3 buckets: those matters related to risk and protection; those regarding savings and investing; and those respecting retirement and wealth distribution.

Here’s another example: Even though we live and breathe it, we can never assume a client grasps the differences between term and permanent life insurance. What we can do is clarify those differences and edify that owning the right amount of life insurance is more important than the type of insurance.

Another one: We already know that by most calculations, most Americans are unprepared and have not saved enough for the future. The Pension Protection Act of 2006 passed by Congress this summer has a significant impact upon pension and savings plans, deferred compensation plans, employer-owned life insurance, 529 college savings plans and long-term care. This new legislation serves many purposes, several of which may be important to your clients. And so it’s well worth taking the time to show how the law provides them with a valuable tool to use in preparing for retirement.

For clients who are business owners, Congress also passed (as part of the Pension Protection Act) legislation that contains new requirements for certain business-owned life insurance to qualify for a tax-free death benefit. The legislation limits the classes of employees who can be covered under business-owned policies, including key person, split-dollar and nonqualified deferred compensation arrangements. Reviewing these requirements with business clients who are planning to purchase these policies may be beneficial.

On the theoretical side, you can make a client smarter by making him or her aware of how “blind spots”–loss aversion, framing and mental accounting–can affect decisions in real-life financial situations. Blind spots are a product of emotion and can handicap even the savviest of clients. No one is immune and when people become aware of them, they are much better equipped to build a financially secure future for themselves.

For the financial professional, there is no shortage of opportunities to educate clients. And when you do this, you’re demonstrating value to your client in a way that is beyond compare. The more they learn from you, the more they’ll come to you for your expertise.

Financial education is indispensable to the long-term well-being of all Americans.