Investor’s profile, behaviors, and financial well-being
BEHAVIOURAL SCIENCES AND INVESTOR EDUCATION CONFERENCE
Securities and Exchange Commission of Brazil
7-8 December 2017
Valeska Marinho
www.valeskamarinho.med.br
Financial well-being and Health
Relationship between mental wellbeing and financial
management
Relationship between financial satisfaction and happiness
Relationship between health and financial satisfaction
Financial dimensions of quality of life
Financial well-being – definitions and measurements
Stress and finances
Mental wellbeing and financial management
Collard, Sharon and Hayes, David (2014). Financial Wellbeing In Later Life: Evidence And Policy.
ILC-UK, London. Available at: http://www.ilcuk.org.uk
Self-reported financial situation is a strong indicator of mental wellbeing
≥50 who are ‘Finding it very difficult’ to manage financially have almost eight times the odds of poor mental wellbeing compared with those who say they are ‘Living comfortably’
Financial well-being was positively related to a broader sense of perceived good general health
Mental wellbeing and financial management
Collard, Sharon and Hayes, David (2014). Financial Wellbeing In Later Life: Evidence And Policy.
ILC-UK, London. Available at: http://www.ilcuk.org.uk
Arber S, Fenn K, Meadows R. Subjective financial well-being, income and health inequalities in mid and later life
in Britain. Soc Sci Med. 2014 Jan;100:12-20.
≥50 years – self-reported financial satisfaction and happiness are closely intertwined (also in the Globe!)
Collard, Sharon and Hayes, David (2014). Financial Wellbeing In Later Life: Evidence And Policy.
ILC-UK, London. Available at: http://www.ilcuk.org.uk
Financial satisfaction and happiness
Individual-level characteristics explain most of the difference
Being divorced or separated;
Being unemployed;
Having low levels of education;
Self-categorizing as lower class;
Having no savings.
Collard, Sharon and Hayes, David (2014). Financial Wellbeing In Later Life: Evidence And Policy.
ILC-UK, London. Available at: http://www.ilcuk.org.uk
Financial satisfaction and happiness
Perceived expectation of future financial difficulty was associated with a decline in reported QoL for both genders
Higher levels of financial wealth also demonstrated a significant positive association with QoL
Higher subjective socio-economic status was associated with greater quality of life
Women on average record 1.2 points higher wellbeing
Living alone was significant for women, but in a positive direction
Age, depression, illness that limits activity, limitation in activities of daily living (ADLs) worst QoL
Financial dimensions and QoL
Collard, Sharon and Hayes, David (2014). Financial Wellbeing In Later Life: Evidence And Policy.
ILC-UK, London. Available at: http://www.ilcuk.org.uk
Health Quality of Life Financially secure Keeping active: - mental, cognitive, social Happiness
Tate R et al., The Gerontologist (2003) 43 (5):735-744.
Successful Aging
Financially healthy, happy, and free from worry with regards to
financial problems (CFPB, 2015).
According to the consumer’s perspective:
A feeling of being able to fully meet current and ongoing
financial obligations, feel secure about the financial future,
and being able to make choices to enjoy life (CFPB, 2015;
Zyphur, Li, Zhang, Arvey, & Barsky, 2015).
Financial well-being Definition
Related to several variables:
Personality characteristics,
Life experiences,
Behavior,
Concern,
Personal judgment regarding the common personal
finance topics of money, credit, and economic resources
(Prawitz et al., 2006).
Financial well-being
Why measures of financial well-being is a need?
Financial education is key to promoting positive financial behaviors
and to achieving better financial satisfaction and well-being,
Understanding, measuring and promoting Financial well-being is is an
important step in promoting health and QoL,
Achieving financial well-being is one of the many objectives in
promoting financial education, adequate measures of such construct
in local language is an important step.
Financial well-being
Marinho V; Howat-Rodrigues, A. B. C; Laks J in press
Free and reliable tool
Measures financial well-being across different individuals and
the same individual over time (CFPB, 2017).
Objective measures of financial well-being are not yet
available in Brazilian Portuguese.
Consumer Financial Protection Bureau CFPB's Financial well-being scale
Objective measures of financial well-being are not yet
available in Brazilian Portuguese.
CFPB's Financial well-being scale
Study design
Initial step – translation and adaptation
Second step - qualitative statistical analysis and theoretical
adequacy of data analyzed.
Ethical Consideration
The Ethics Committee on Human Research from Institute of
Psychiatry Federal University of Rio de Janeiro approved this
research and all participants signed an informed consent form
CFPB Financial well-Being Scale translation and adaptation process
Marinho V; Howat-Rodrigues, A. B. C; Laks J in press
CFPB Financial well-Being Scale translation and adaptation
process
CFPB well-being instrument is a 10 item 5-Likert scale,
extensively tested and validated, ensuring validity and
reliability. The scale is driven by the consumer’s perspective of
FWB and allows a single score, capturing the core elements of
FWB.
CFPB Financial well-Being Scale translation and adaptation process
Marinho V; Howat-Rodrigues, A. B. C; Laks J in press
Three English language proficient researchers
100% of concordance - seven items,
Discordance met 33,3% and when concordance were met between two researchers this version was chosen.
Likert label 100% concordance.
Items presented to a convenience sample comprised of 10 individuals attending a conference organized by Brazilian Securities and Exchange Commission, both sex, mean age 43.3 years (21-63 years-old).
Translation and item adaptation of a CFPB well-being scale
Marinho V; Howat-Rodrigues, A. B. C; Laks J in press
Participants
834 people (264 women and 570 men) who responded to an
invitation sent by the Brazilian Securities and Exchange
Commission mailing list or from a website online invitation.
Mean age 39.27 years (dp=10.82)
High schooling years (60.9% post-graduate),
Married or living together (60%)
High purchasing power (41.36 dp=13.27).
CFPB Financial well-Being Scale translation and adaptation process
Marinho V; Howat-Rodrigues, A. B. C; Laks J in press
Instruments
Socio-demographic data: Gender, age, schooling years
Purchasing power index - Brazilian Association of Market
Research Companies (ABEP, 2016)
QoL was assessed by a 5 Likert scale for the question “How
would your score your current quality of life?”
CFPB Financial well-Being Scale translation and adaptation process
Marinho V; Howat-Rodrigues, A. B. C; Laks J in press
Evidence of the validity of the internal structure was assessed
based on exploratory factor analysis and confirmatory factor
analysis.
We also verified the validity of measures analyzing contrasting
groups. For the analysis of contrasting groups, we used
differentiation based on quartis of original score of Well-
Being, and we verified if these groups were different on QoL
and purchasing power.
CFPB Financial well-Being Scale translation and adaptation process
Marinho V; Howat-Rodrigues, A. B. C; Laks J in press
Results
Brazilian sample indicate a unidimensional measure with
satisfactory validity and reliability.
Exploratory and confirmatory factor analysis demonstrated
high level of reliability of the items and goodness of fit.
10 items distributed in one factor, called financial well-being.
The measure showed structural stability in the two different
cultural contexts (Brazil and USA)
CFPB Financial well-Being Scale translation and adaptation process
Marinho V; Howat-Rodrigues, A. B. C; Laks J in press
Results
Analysis by contrasting groups.
Instrument’s ability to discriminate between groups:
The group with higher financial well-being presented
higher averages in purchasing power and QoL;
The group with lower financial well-being, presented lower
averages in purchasing power and QoL.
CFPB Financial well-Being Scale translation and adaptation process
Marinho V; Howat-Rodrigues, A. B. C; Laks J in press
To our knowledge this is the first adapted and validated
measure of financial well-being in our language.
The increase in economically active population in developing
countries such as Brazil, the possibility of changes in local
labor laws, and the growing enhance in purchasing power in
lower-middle income classes, points to the need to enhance a
culture of investing and to provide financial education in our
country.
Final remarks
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