Asking for Help: Survey and Experimental Evidence on Financial Advice and Behavior Change

47 Pages Posted: 8 Jan 2010 Last revised: 20 Jan 2010

See all articles by Angela Hung

Angela Hung

RAND Corporation - Labor and Population

Joanne Yoong

RAND Corporation

Date Written: January 7, 2010


When do individuals actually improve their financial behavior in response to advice? Using survey data from current defined-contribution plan holders in the RAND American Life Panel (a probability sample of US households), the authors find little evidence of improved DC plan behaviors due to advice, although they cannot rule out problems of reverse causality and selection. To complement the analysis of survey data, they design and implement a hypothetical choice experiment in which ALP respondents are asked to perform a portfolio allocation task, with or without advice. Their results show that unsolicited advice has no effect on investment behavior, in terms of behavioral outcomes. However, individuals who actively solicit advice ultimately improve performance, in spite of negative selection on financial ability. One interesting implication for policymakers is that expanding access to advice can have positive effects (particularly for the less financially literate); however, more extensive compulsory programs of financial counseling may be ultimately ineffective.

Suggested Citation

Hung, Angela and Yoong, Joanne, Asking for Help: Survey and Experimental Evidence on Financial Advice and Behavior Change (January 7, 2010). RAND Working Paper Series WR-714-1, Available at SSRN: or

Angela Hung (Contact Author)

RAND Corporation - Labor and Population ( email )

United States

Joanne Yoong

RAND Corporation ( email )

1200 South Hayes St
Arlington, VA 22202
United States

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