Factors that Influence Financial Capability and Effectiveness: Exploring Financial Counsellors’ Perspectives

Abstract

The financial capability of the community has become a topical issue in recent years around the globe. The role financial education plays improving financial capability is recognised by the G20 countries. With a plethora of programs, workshops, seminars and other resources available in the community, we find that there is little research that measures the impact/usefulness of these programs including what should be included in such programs. This study seeks to contribute to the understanding of the underlying determinants of financial capability by exploring the factors that influence this. Focus groups were conducted with financial counsellors in Queensland, Australia to explore factors that inhibit and promote financial capability. This included factors that impede the development of capability and the others that impact on the development of intention to engage in financially effective behaviour. We report that financial counsellors view confidence, self-esteem and self-belief as equally important determinants of financial capability. Also, gender and family socio economic status influence an individual's ability to engage in financially effective behaviour. The results also found that adopting a short-term focus, rather than future orientation, is a key inhibitor of financial effectiveness. Consequently it is suggested that those developing financial capability programs address these behavioural and contextual factors rather than concentrating purely on literacy.

Gender differences in financial behaviours

“…However, not every person is willing to use the relevant products or services in the same way. Moreover, the market for financial services is becoming increasingly complex and complicated, and the responsibility for taking financial decisions rests solely on the individual making choices in this regard (Vyvyan et al, 2014). Meanwhile, a number of studies have shown that the state of personal finances, economic prosperity and financial behaviours differ significantly between men and women (Fisher, 2010;Theodos et al, 2014;Chen & Volpe, 2002;Lusardi & Mitchell, 2008).…”

Financial Learning: Is It The Effective Way to Improve Financial Literacy among Accounting Students?

“…Aside from that, sometimes what the teenager's demand is beyond their parents' capability to provide as their fund source, that can lead to a new economy problem in the family.The matter whether someone is consumptive or not is a result of the minimum financial knowledge (financial literacy). Along with that, some researchers have shown that financial literacy has a significant impact on one's financial behavior [1,2,3]. Someone who has low financial literacy usually has a financial problem in his life.…”

Personality Traits and Perceived Investment Performance: Mediating Role of Social Influence

“…It has been proven that guidance is provided to individuals based on their personality traits for resolving an unidentified situation. Thereby, it has been validated that the risk tolerance will be highly observed among younger potential investors as compared to the expert potential investors (Vyvyan et al, 2014).…”

“…According to Vyvyan, Blue, and Brimble (2014), personality is the core construct of behaviors, motives, feelings, and thoughts for every individual. It demonstrates as a combination of perceptual, cognitive, and differentiating motivational and emotional attributes (Netemeyer, Warmath, Fernandes, & Lynch Jr, 2018).…”