A Review of Financial Advice Models and the Take-Up of Financial Advice

money_graphFinancial advice can complement educational interventions for individuals with technical financial issues or acute financial problems; it may also help clients apply knowledge gained from education and adhere to financial goals.  This paper by J. Michael Collins reviews the literature on financial advice and develops a taxonomy of financial advice models.  Empirical research suggests financial advice has modest or no effects on investment returns and that financial counseling has weak impacts on financial behavior.   Using data from the 2009 FINRA Financial Capability Survey, the paper presents evidence that individuals with higher incomes, educational attainment, and financial literacy are most likely to receive financial advice.

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