How Cognitive Ability and Financial Literacy Shape the Demand for Financial Advice at Older Ages / Hugh Hoikwang Kim, Raimond Maurer, Olivia S. Mitchell.

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Kim, Hugh Hoikwang

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w25750.Publication details: Cambridge, Mass. National Bureau of Economic Research 2019.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: We investigate how cognitive ability and financial literacy shape older Americans' demand for financial advice using an experimental module in the 2016 Health and Retirement Study. We show that cognitive ability and financial literacy strongly improve the quality, but not the quantity, of financial advice sought. Most importantly, the financially literate and more cognitively able tend to seek financial help from professionals rather than family members, and they are less likely to accept so-called 'free' financial advice that may entail conflicts of interest. Nevertheless, those with higher cognitive function also tend to distrust financial advisors, leading them to eschew their services.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w25750 (Browse shelf(Opens below))	Not For Loan

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April 2019.

We investigate how cognitive ability and financial literacy shape older Americans' demand for financial advice using an experimental module in the 2016 Health and Retirement Study. We show that cognitive ability and financial literacy strongly improve the quality, but not the quantity, of financial advice sought. Most importantly, the financially literate and more cognitively able tend to seek financial help from professionals rather than family members, and they are less likely to accept so-called 'free' financial advice that may entail conflicts of interest. Nevertheless, those with higher cognitive function also tend to distrust financial advisors, leading them to eschew their services.