Financial Adviser Anxiety, Financial Literacy and Financial Advice Seeking

Abstract

Seeking professional financial advice to assist with financial decision making is an important option for individuals faced with increased responsibility for their financial circumstances. We explore the role of two potential barriers/enablers to accessing advice. First, we explore the role of a variety of financial literacy measures to explain observed financial advice consultation. Second, we introduce a novel measure of financial adviser anxiety. The latter is inspired by evidence in the medical setting suggesting individuals may refrain from seeking advice where objectively it is assessed to be in their interests to do so. This may due to embarrassment, worry or anxiety with the consultation process. A new scale is presented which has strong validity and a demonstrated ability to explain reported future levels of professional advice seeking.

Keywords: financial advice, financial literacy, financial adviser anxiety, personal finance, retirement planning

JEL Classification: D14, G20, G23