Financial advisors say women and individuals under the age of 45 are much less knowledgeable about personal finance than male and older investors. This is according to the first financial literacy flash survey conducted by AdviceIQ, in recognition of Financial Literacy Month, currently under way.

Other key findings of the survey are:

• Women continue to lag behind men in financial literacy. Overall, more than 60 percent of advisors said that most investors have an average understanding of personal finance but just 9 percent believed female clients are more knowledgeable than men, while more than 50 percent of advisors said male clients are more financially literate.
• Younger investors lack financial awareness. Although clients in their 30s and early 40s are working with financial professionals, only 6 percent of them were viewed as financially savvy; by comparison, 75 percent of clients in their mid-40s and older were believed to be money-wise.

“Due to their personal interaction with investors, financial advisors can serve as a terrific barometer on the current state of investor knowledge, and the feedback we’ve received from our survey respondents reveals an urgent need for financial education that helps women and younger investors close the information gap and jumpstart their financial futures,” states Nick Stuller, CEO of Advice IQ. The firm publishes the Meridian-IQ suite of Financial Advisor Directories, licensed by over 500 major fund companies, broker-dealers and insurance companies for industry research and marketing purposes.

Part of the solution, adds Stuller, comes from the advisors’ efforts to inform clients and to encourage a dialogue about money matters. At the same time, he points out, investors must take it upon themselves to improve their understanding of personal finance. This will ensure better financial outcomes as they work with advisors to grow wealth over time.

Additional findings of the survey include:

• Limited financial literacy impacts retirement savings. More than a third of advisors (34 percent) said that the biggest mistake clients make is waiting too long to start saving. In general, this money challenge is closely correlated with financial knowledge.
• Wealthier clients are the most financially literate. Almost 60 percent of advisors viewed their wealthier clients as the most financially sophisticated while 37 percent did not view wealth as a factor when evaluating money skills.

The flash survey was conducted online in March 2013, using AIQ’s database of U.S. financial advisors to randomly poll thousands of advisors. Three hundred and fifty advisors participated in the survey, with representative client bases of both high-net-worth and middle-income investors.

Please visit http://adviceiq.com/financial-literacy-survey-2013 for a downloadable “infographic” with survey results.

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By Ayo Mseka
Editor-In-Chief
Advisor Today