By Linda Leitz, Ph.D., CFP®, EA
As a growing profession, personal financial planning practitioners have the opportunity to establish a mutually beneficial relationship with the academic programs that support the profession. This includes supporting and hiring graduates from the certificate, undergraduate, and Master’s levels programs in financial planning. It also includes connecting research and practice by giving ideas for potential exploration to the academic community and to be consumers of research by gathering and implementing information from that research.
One of many great examples of helpful research for practitioners comes from an article by Drs. Martin Seay and Stuart Heckman from Kansas State, along with Dr. Kyoung Tae Kim from the University of Alabama. This article, entitled “Exploring the Demand for Retirement Planning Advice: The Role of Financial Literacy” was published in 2016 in Financial Services Review.
Drs. Seay, Kim, and Heckman measured financial literacy through financial knowledge and confidence as well as the ability to put financial concepts into practice. Their research questions involved the relationship between financial literacy and whether consumers sought, initiated, and maintained relationships with financial planners, and suggested that there is a positive relationship. This article has excellent resources in the literature review to bolster the concepts around how financial literacy among consumers can help positive financial outcomes.
Any well done research article like this one allows practitioners to gather experience and expertise that wouldn’t be available in a single practice. For instance, the study in this article used a national data set that drew answers from over 12,000 consumers. Objective research like this can either change how planners approach client concerns or reinforce the approach the planners are taking by supporting their financial planning methods.
This study helps bridge a gap between research and practice. The findings from this study stimulate ideas for offering financial literacy services (i.e., educational offerings for consumers) and may give ideas about reaching prospective clients who are financial literate. Articles such as this one can be an excellent tool for practitioners and academics to support each other. To read the full length article, click here.