Financial Advice: A Substitute for Financial Literacy?

Abstract:     
A lack of financial literacy can hamper the ability of individuals to make well-informed financial decisions. For people who exhibit problems with financial decision making, financial advice has the potential to serve as a substitute for financial knowledge and capability. However, data from the 2009 FINRA Financial Capability Survey indicate that advice more often serves as a complement to, rather than a substitute for, financial capability: individuals with higher incomes, educational attainment, and levels of financial literacy are most likely to receive financial advice.

Number of Pages in PDF File: 28

Keywords: : Financial planning, Financial capability

JEL Classification: D14, P46, G29

working papers series