Predictors of financial advice: An evidence from a developing nation

Abstract

The financial markets and products become increasingly complicated day by day, and the current pandemic is adding fuel to the fire, causing volatilities in the financial markets around the globe and a tough time to the individuals. To make better financial decisions, one needs sufficient level of financial literacy, but past studies revealed that most countries have below-average financial literacy, and it takes a long time to improve it. So, in such a scenario, financial advice is a quick way for individuals to make a better financial decision. It can be an easy and quick substitute for financial literacy in the short run. Therefore, considering the usefulness of financial advice, this paper investigates the direct effect of demographic (gender and education), financial anxiety, financial capability, financial satisfaction, and online fransaction use on financial advice. The main objective of the paper is to understand the determinants of financial advice. The study is conducted in the northern part of India, collecting data through a self-reporting scale from individuals above 18. The paper applied hierarchical multiple regression with three steps in order to find the effects on financial advice. The findings indicate that financial advice is affected by financial anxiety, financial satisfaction, and online fransaction use. Gender and education failed to reflect a significant effect on financial advice. Hence, this paper strengthens the existing literature of financial advice through the integrated framework, considering how an individuals' financial anxiety, financial capability, financial satisfaction, and online transaction use (being a part of digital financial literacy) drive individuals' financial advice-seeking behaviour. The novelty of the paper is the integrated framework itself as the chosen variables combined on the individuals' financial advice are not explored yet.