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| Does Financial Advice Substitute for Financial Literacy? |
| WU Kun, WU Weixing
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School of Economics, Beijing Wuzi University;
Research Center for Applied Finance, University of International Business and Economics |
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Abstract The lack of financial literacy may hamper the ability of households to make well-informed financial decisions as the increasing development of the financial market. While the quality financial advice can improve the households’ financial decisions. The relationship between the households’ financial literacy and the demand of financial advice is investigated in this paper using the data from “Chinese Survey of Consumer Finance and the Investor Education”. The study finds that financial advice can be complementary to households’ financial literacy, i.e. the household with high level of financial literacy is more likely to have the demand of financial advice. The paper also finds: (1) the demand for financial advice is “hump” shape related to household income and is “U” shape related to the age of head; (2) the household’s net-wealth, health status, and education levels have positive effect on the demand for financial advice; (3) compared to men, women are more likely to consult an advisor.
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Received: 17 March 2017
Published: 18 January 2018
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