Understanding Why People Seek Financial Advice
By Linda S. Jamison
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Most studies show that few Americans actively seek advice from financial experts about how to manage their money. People who rely on their own judgment and understanding of complex financial issues often make poor financial decisions. For their article, Alyousif and Kalenkoski used the 2012 National Financial Capability Study (NFCS), which includes a financial literacy question on each of these five topics: (1) compound interest, (2) inflation, (3) bond price, (4) mortgage interest, and (5) risk. This study examines psychological, demographic, and economic factors in order to shed light on whether consumers will look to experts for five kinds of advice: (1) managing debt, (2) handling investments and savings, (3) securing a mortgage or loan, (4) purchasing insurance, and (5) tax planning. While people who struggle with managing their money might lack the self-confidence and the understanding of how to make beneficial financial decisions, the authors contend that other factors—such as age, gender, income, and financial literacy—play a role in whether consumers will actively seek advice about financial matters.
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About the Author
Linda S. Jamison is an author, public speaker, and consultant who has served in senior executive positions in the US government, including in the White House. She has worked at the United Nations and was a senior leader with the Center for Strategic and International Studies, where she was the founding dean of an international leadership academy. Jamison has trained and advised policymakers and political leaders in the art and practice of leadership both in the United States and abroad. She has a master’s degree from American University in Washington, DC, and a bachelor’s degree from the University of Denver.