The impact of socialisation factors on financial literacy amongst employees in the financial services industry

Abstract

This study seeks to understand the financial socialising agents which play a role in the South African context, in addition to the role and influence of family financial socialising and financial socialising by agents such as friends, peers, formal financial education and multimedia. If there is a clear understanding of how financial socialisation takes place and what informs financial behaviours, government and business can focus their efforts to ensure that South Africans have an increased financial capability. This will improve financial literacy and lead to increased financial security which is a necessity for overall wellness. A hypothetical model (Figure 2) was created from concepts that emerged during the literature review. An online questionnaire was completed by 300 participants in the financial services sector, examining factors which influenced the financial literacy and financial security of individuals. Principal Component Analysis was used to identify the components while Chi-square tests and Spearman s Rho was used to analyse the data for associations. Different factors influence financial literacy and financial security. This study did not find parents to be a significant influencer of financial socialising. Peers, friends and work colleagues were also not found to be a significant influencer of financial literacy and had a negative influence on financial security. Certain components of multimedia such as reading books were found to influence an individual s level of financial literacy and education, including formal financial education influenced the level of financial security. Demographic factors such as race and income also influence financial literacy and security. Keywords Financial