Financial literacy and pension investment decisions

Gallery, Natalie, Gallery, Gerry T., Brown, Kerry A., Furneaux, Craig W., & Palm, Chrisann T. (2011) Financial literacy and pension investment decisions. Financial Accountability and Management, 27(3), pp. 286-307.

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The call for enhanced financial literacy amongst consumers is a global phenomenon, driven by the growing complexity of financial markets and products, and government concerns about the affordability of supporting an ageing population. Worldwide, defined benefit pensions are giving way to the risk and uncertainty of defined contribution superannuation/pension funds where fund members now make choices and decisions that were once made on their behalf. An important prerequisite for informed financial decision-making is adequate financial knowledge and skills to make competent investment decisions. This paper reports the findings of an online survey of the members of a large Australian public sector-based superannuation fund and shows that although respondents generally understand basic financial matters, on average, their understanding of investments concepts, such as the relationship between risk and returns, is inadequate. These results highlight the need for education programs focusing specifically on developing fund members’ investment knowledge and skills to facilitate informed retirement savings decisions.

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ID Code: 42518
Item Type: Journal Article
Refereed: Yes
Keywords: Financial Literacy, Investment Decisions, Risk, Pension Funds, Superannuation
DOI: 10.1111/j.1468-0408.2011.00526.x
ISSN: 0267-4424
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Current > Schools > School of Management
Deposited On: 10 Jul 2011 22:07
Last Modified: 14 Mar 2017 02:02

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