Professionals, especially women, can use a boost to their financial literacy. Will marketers answer the call?
August 13, 2014
Numerous studies have shown that, on average, women have lower financial literacy scores compared to men. This is important because financial literacy is believed to be a key factor for accruing wealth and achieving financial security. In a recent study on our US LinkedIn members, we found that this gender gap was also true among professionals, regardless of seniority.
LinkedIn is the ideal platform for helping professionals improve their financial literacy. We know that professionals use LinkedIn as a primary source for finding and consuming professionally relevant content and over 40% reported that they would be happy to receive financial planning and advice in their LinkedIn feed. There is a clear opportunity for financial service brands to provide this content and, thus, build familiarity and trust with LinkedIn’s affluent professionals.
Why financial literacy matters
Financial literacy may be the most important “life skill” that is ignored by our educational system. Every stage in life involves important financial decisions – school loans, credit cards, mortgages, retirement, etc. When handled poorly, people can get boxed into long-term struggles, derailing their ability to weather unexpected challenges and explore new paths in life.
Financial literacy is a step toward the ultimate goal of financial security. And financial security equals freedom. It’s the freedom to leave bad jobs, careers, relationships, and neighborhoods, etc. It’s the freedom to invest more in yourself (e.g., education), your passions, and others (e.g., family, charities, etc.).
Financial literacy predicts financial security among professionals
We surveyed over 4,000 US LinkedIn members in July and we saw a very clear relationship between financial literacy and security. Compared to low-financial literacy professionals, LinkedIn members with high financial literacy scores had:
- Exhibited good financial planning (estimating retirement needs and having a rainy day savings fund)
- Reported higher levels of investible assets
- Reported higher household incomes (HHI)
Women lag behind men in financial literacy, even among professionals
Numerous studies have found that woman, globally, score lower on financial literacy compared to men. Although numerous hypotheses have been tested, it’s still not clear why this gender gap exists. Some researchers believe that women might acquire financial literacy differently than men and that differences in self-confidence could play a role, too.
In 2012, FINRA sponsored a large, US survey that included a standardized 5-question financial literacy test. (You can take the test here.) We gave the same financial literacy test in our LinkedIn survey and, somewhat surprisingly, found the same gender gap in financial literacy among professionals. Regardless of seniority, professional women tended to score lower on financial literacy than professional men.
How marketers can help professionals achieve financial security
For millions of professionals, LinkedIn has become a primary source for finding and consuming professionally-relevant content. They view LinkedIn as a trusted platform and believe that their time spent on the site is an “investment” towards achieving success or aspirational goals. We think that there is a very strong tie between striving for professional success and achieving financial security.
In our LinkedIn survey, we asked our members:
“How satisfied or dissatisfied would you be if financial planning advice or information (e.g., articles, videos, infographics, etc.) occasionally appeared in your LinkedIn feed?”
Over 40% of men and women said that they would be satisfied if this kind of content appeared in their LinkedIn feed (41% were indifferent, with 18% not interested). Furthermore, interest in this kind of content was consistently high across all levels of seniority, HHI, and investible assets.
Marketers have widely embraced the power of content marketing. Based on our research, we see a unique opportunity for financial services brands to build familiarity and trust with professionals on LinkedIn because:
- Improving financial literacy can have a large, material impact on a person’s life
- LinkedIn is a trusted platform and affluent professionals would like to see content related to financial advice and planning in their LinkedIn news stream
- Financial services brands are well positioned to provide this relevant and valuable content
Ready to get started reaching these professionals with the right content in the feed? Contact us to learn more about how Sponsored Updates can help.
*Image source: Dimespring