Overconfidence in Financial literacy

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de Zwaan, Laura
Lee, Chrisann
Liu, Yulin
Chardon, Toni
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2017
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Abstract

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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Financial Planning Research Journal

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3

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2

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© 2017 Griffith University. The attached file is reproduced here in accordance with the copyright policy of the publisher. Please refer to the journal's website for access to the definitive, published version.

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Banking, Finance and Investment not elsewhere classified

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