The effect of financial literacy, financial behaviour and financial stress on awareness of investment scams among retirees

Abstract

Purpose This study aims to investigate the effects of financial literacy, financial behaviour and financial stress on awareness of investment scams among retirees. Design/methodology/approach Using a questionnaire survey, data was distributed to 200 retirees. A total of 53 responses were obtained. The data was subsequently analysed using PLS-SEM version 3 software. Findings Findings indicated that while financial literacy has a significant influence on awareness, there is no conclusive evidence to support the relationship between financial behaviour and financial stress on awareness. These results highlighted the critical need to strengthen financial literacy among retirees as a prevention mechanism for them to avoid from being scammed. Research limitations/implications The finding from this study is relevant to regulators and law enforcement agencies to aid potential and actual retirees by educating them on the danger of investment scams. Originality/value As there are relatively few studies conducted on investment scams specifically among retirees, this study extends the investment scam literature by examining the underlying factors that affect their awareness towards the fraudulent activities.