Financial Advice: A Substitute for Financial Literacy?

Collins, J. Michael

doi:10.2139/ssrn.2046227

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Financial Advice: A Substitute for Financial Literacy?

Financial Services Review, Vol. 21, No. 4, 307-322

16 Pages Posted: 26 Apr 2012 Last revised: 5 Feb 2014

See all articles by J. Michael Collins

J. Michael Collins

Follette School of Public Affairs

Date Written: 2012

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.

Keywords: Financial planning, Financial capability

JEL Classification: D14, P46, G29

Suggested Citation: Suggested Citation

Collins, J. Michael, Financial Advice: A Substitute for Financial Literacy? (2012). Financial Services Review, Vol. 21, No. 4, 307-322, Available at SSRN: https://ssrn.com/abstract=2046227 or http://dx.doi.org/10.2139/ssrn.2046227