Research On The Effect Of Financial Literacy On Household Wealth Management

Since the reform and opening up in 1978,China's economy has experienced 40 years of rapid development,and the household wealth of residents has also produced a qualitative leap.According to Boston's 2019 global private wealth report,although the global private wealth reached $205.9 trillion in 2018,an increase of 1.6%,the increase was significantly slower than the previous year's 7.5%.Among them,the Chinese are the fastest to get rich,with an average annual growth rate of 11%expected in 2019-2033.On the other hand,the degree of wealth imbalance between households is expanding.Chen Zhiwu,a famous financial scholar,once pointed out that the general public can reduce the degree of wealth inequality among residents by participating in the financial market.The level of residents' internal financial literacy will directly affect the external financial contact behavior,and these two perspectives can well explain the different financial participation decision-making behavior of family residents.This paper uses the 2015 China Household Financial Survey data of China family financial survey and research center of Southwest University of Finance and economics,and uses censoring data model,discrete choice model and regression model to study the impact of financial literacy on family wealth management and its transmission mechanism.Based on the questionnaire data,this paper selects 26 variables to enter the model,uses factor analysis to construct financial literacy,financial participation and household wealth management proxy indicators,and uses OLS estimation multiple regression analysis and logit two variable regression method to conduct empirical analysis,to investigate the correlation between residents' financial literacy level and household wealth management.The results show that:financial literacy and financial participation have significant impact on different dimensions of family wealth management,including negative impact on the proportion of cash holdings,and positive impact on the proportion of venture capital,insurance allocation and financial planning.In addition,in the control variables,education level,marriage status,health status and mortgage constraints also have different degrees of impact on family wealth management.Combined with the above conclusions,the following suggestions are put forward:1.For financial consumers of family residents,when carrying out family wealth management,it is necessary to improve their own financial literacy of family members,and also to take a rational view of the professional guidance and planning that financial advisers can bring,and actively and scientifically accept the products and services of the financial market;2.Financial institutions should increase the number of suitors The financial categories required by the court's wealth management and the professional quality of service personnel such as financial consultants should be improved;3.The government regulatory authorities should strengthen the education of residents' financial literacy and the protection of the rights and interests of financial firefighters,establish legal and compliant litigation process when the loss of household wealth is caused by moral hazard caused by information asymmetry,and establish the Qualification Access of financial intermediaries and personnel And the corresponding reward and punishment mechanism as well as the corresponding information disclosure system.