How Financial Literacy Shapes the Demand for Financial Advice at Older Ages

TitleHow Financial Literacy Shapes the Demand for Financial Advice at Older Ages
Publication TypeJournal Article
Year of Publication2021
AuthorsKim, HH, Maurer, R, Mitchell, OS
JournalThe Journal of the Economics of Ageing
Volume20
Pagination100329
ISBN Number2212-828X
Keywordsfinancial advice, Financial literacy, Financial Management
Abstract

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.

DOI10.1016/j.jeoa.2021.100329Get
Citation Key11663