Is Seeking Financial Advice Essential? An Empirical Relationship Between Financial Literacy, Financial Anxiety, and Financial Advice Seeking

Abstract

The present study covers three major objectives: to measure the factors measuring financial literacy among residents of the state of Gujarat, to measure the relationship among financial anxiety (FA), financial literacy (FL), and financial advice seeking (FAS), and to construct a model for the relationship among FA, FL, and FAS. Based on a literature review of science-cited journals, a 52-statement structured questionnaire was designed and circulated among respondents with diverse ages, educational backgrounds, and income groups to strengthen diversity. Non-probability convenience sampling yielded 909 responses from 33 districts in Gujarat, India. Collected responses were factorized using exploratory factor analysis followed by Structural Equation Modelling. The analysis concludes that FA is a multidimensional construct. Additionally, FA has a weak but negative relationship with FL and a Strong positive relationship with FAS. The study reflects very weak positive relations between FL and FAS. Therefore, it can be concluded that FL does not resolve the FAS to a large extent, but FA surely compels the person to seek Financial Advice. The study is limited to the Indian context and lacks further investigation into the reasons for the relationship among FL, FA, and FAS.