How Financial Literacy Shapes the Demand for Financial Advice at Older Ages
Journal of the Economics of Ageing, Forthcoming
38 Pages Posted: 22 Apr 2019 Last revised: 7 Jun 2021
Date Written: March 30, 2019
We investigate how financial literacy shapes older Americans’ demand for financial advice. Using an experimental module fielded in the Health and Retirement Study, we show that financial literacy strongly improves the quality but not the quantity of financial advice sought. In particular, more financially literate people seek financial help from professionals. This effect is more pronounced among older people and those with more wealth and more complex financial positions. Our analysis result implies that financial literacy and financial advisory services are complementary with, rather than substitutes for, each other.
Keywords: financial advice, financial literacy, aging, money management, Health and Retirement Study
JEL Classification: D14, G11, G41, J26
Suggested Citation: Suggested Citation