Overconfidence in financial literacy: implications for planners

de Zwaan, Laura and Lee, Chrisann and Liu, Yulin and Chardon, Toni (2017) Overconfidence in financial literacy: implications for planners. Financial Planning Research Journal, 3 (2). pp. 31-46. ISSN 2206-1347


Financial literacy of clients is an important consideration
for financial planners as it has implications for determining financial capacity. Likewise, overconfidence is also an important concern, given that overconfident clients may indicate they understand advice when in reality they do not. Using an online survey, we gathered data on subjective and objective levels of financial literacy from a sample of university students. We then examined the associations between self-assessed and actual levels of financial literacy with the aim of identifying overconfidence. We find, generally, respondents do not overestimate their financial literacy; however, respondents with English as a second language were significantly more overconfident than other demographic groups. These findings can help planners in identifying clients who may be overconfident in their own financial literacy.

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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: © 2017 Financial Planning Research Journal.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Law and Justice
Date Deposited: 18 Jan 2018 01:48
Last Modified: 24 Apr 2018 01:30
Uncontrolled Keywords: financial literacy, overconfidence, seemingly unrelated regression, measuring agreement, online questionnaire survey
Fields of Research : 15 Commerce, Management, Tourism and Services > 1502 Banking, Finance and Investment > 150201 Finance
18 Law and Legal Studies > 1801 Law > 180125 Taxation Law
URI: http://eprints.usq.edu.au/id/eprint/33000

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