Racial and gender differences in financial advice seeking: Evidence from the National Financial Capability Study

Abstract

There is a growing interest to increase diversity among consumers who are seeking financial advice, but the influences of race and gender on financial advice seeking have not been widely explored in the literature. We examine the role of race and gender on financial advice seeking among U.S. households by employing a decomposition technique. The findings highlight that asking for financial advice is not determined by race or gender in and of itself, but by the racial and gender differences in the predictors associated with financial advice seeking. Black and female consumers were found to be more likely to ask for financial advice when making savings and investment decisions. The relationships between financial advice seeking and income level, employment status, education level, and subjective knowledge differed significantly for Black and White consumers. Employment status, race, and homeownership differed significantly for women and men seeking financial advice. The results show that the predictors which explain financial advice seeking may not apply in the same way to all consumers. Practitioners can use this research to refine how they market and gain a better understanding of how race and gender are associated with certain important variables that are associated with seeking financial advice.