Many Lacking Sound Financial Planning Knowledge

11/10/2010

Having a firm grasp of financial products is important, since many might otherwise ignore solid investment options. A study, in the form of a quiz about financial products by a major life insurance company, found that most weren't very knowledgeable.

Nearly 80 percent of respondents acknowledged that a lack of understanding could be detrimental to their financial well-being. Having access to quality literature can help educate consumers on the benefits of various financial products.

A spokesperson for the insurer, Dave Simbro, says information culled from the study highlights people's desire to manage their funds better.

"We know from this study that most Americans want to be financially self-sufficient, and are focused on preserving their lifestyles and protecting against uncertainty," says Simbro. "This desire makes improving our nation's financial literacy especially relevant, and we believe the first step is an honest assessment of one's personal finance proficiency."

Furthermore, the study reveals that while many understand concepts such as diversification, few are clear about inflation and permanent life insurance.

As the economy continues to recover, people will begin to have more funds available for investing, making the need to understand financial products even more important. 

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