Wharton Pension Research Council Working Papers

Document Type

Working Paper

Date of this Version



We investigate how cognitive ability and financial literacy shape older Americans’ demand for financial advice. Using an experimental module at the Health and Retirement Study, we show that cognitive ability and financial literacy strongly improve the quality but not the quantity of financial advice sought: more financially literate and cognitively able seek financial help from professionals. They also utilize more ‘free’ financial advice that may entail potential conflicts of interest. Finally, among those not seeking financial advice, people with higher cognitive function tend to distrust financial advisors, leading them to avoid these services.


financial advice, cognitive ability, financial literacy, aging, financial management, Health and Retirement Study (HRS)

JEL Code

D14, G11, G41, J26

Working Paper Number


Copyright/Permission Statement

Opinions and conclusions expressed herein are solely those of the authors and do not represent the opinions or policy of the funders or any other institutions with which the authors are affiliated. ©2020 Kim, Maurer, and Mitchell. All rights reserved.


The authors thank Yong Yu and Destan Kirimhan for excellent programming and research assistance. Research funding for this project was provided by the TIAA Institute and the Pension Research Council/Boettner Center at the Wharton School of the University of Pennsylvania.

Included in

Economics Commons



Date Posted: 13 January 2020