Financial Literacy and Financial Advice Seeking for Retirement Investment Choice

Abstract

The research investigates the effects of the degree of financial literacy on financial advice seeking for retirement investment choice as well as assesses the level of financial literacy of Vietnamese employees. An empirical research was conducted by examining 314 individuals who are currently at working stage. This current work also contributes to the present literature by exploring whether the relationship between financial literacy and seeking out advice is a substitute or complementary relationship. The estimation techniques applied in this resaerch are statistics descriptive analysis and two-stage least squares (2SLS) regression. The results of our statistics descriptive analysis indicated that Vietnamese employees have a moderate level of basic and advanced financial literacy. After addressing the endogenous problem by running a two-stage least squares (2SLS) regression, results show that both basic financial knowledge and advanced financial knowledge are positively correlated with financial advice seeking for retirement investment choice. This result also supports the evidence that this relationship may be considered a complementary one. Hence it is recommended that policy makers should concede that along with financial literacy, financial advice ought to be perceived as a complementary mechanism to assist individuals to make informed retirement investment choices.

Improving financial capability: the mediating role of financial behaviour

“…Scholars have found that financial knowledge affects financial management performances and behaviours, and higher financial knowledge able consumers have better financial behaviour (Hilgert et al, 2003;Mitchell & Lusardi, 2011;Nguyen & Rozsa, 2019). On the other side, it was also found that money attitudes and its usage differs as per the consumers' financial goals (Shih & Ke, 2014) and attitudes towards money management effect financial behaviour (Henchoz et al, 2019).…”

General trends and competitiveness of Australian life insurance industry

“…The competition at the financial sector matters for several reasons: the production efficiency of financial services; the quality of financial products; degree of innovation in the sector; the access of firms and households to financial services (Belas et al, 2014;Nguyen & Rozsa, 2019; and a lot of other reasons. That is why the scientific research about the competition in relation to life insurance market and financial market as a whole, are the research subject for many scholars all over the world.…”

Bankers and financial advisers in an emerging economy: are they financially literate?

“…Therefore, the knowledge of financial literacy levels for banking employees is limited in both developed and developing economies. According to Nguyen and Rozsa (2019), those who are financially illiterate seek advice from banking employees, and this advice substitutes financial literacy in making financial decisions. In view of the crucial role they play in society, not knowing the nuances and the levels of banking employee's financial literacy can be detrimental not only to the banking sector but also to the overall economy of a country.…”