Absence of conflict of interest.
Citation
Highlights
- The study’s objective was to examine the impact of vignettes about financial planning on financial knowledge.
- The study was a randomized controlled trial and used data from the Understanding America Study (UAS), an online survey panel that is representative of the U.S. population. The authors used a statistical model to compare the outcomes of treatment and control group members.
- The study found that the financial planning vignettes significantly improved understanding of annuities and Social Security.
- This study receives a high causal evidence rating. This means we are confident that the estimated effects are attributable to the financial planning vignettes, and not to other factors.
Intervention Examined
Financial planning vignettes
Features of the Intervention
The study was a randomized controlled trial that examined the impact of financial planning vignettes on the knowledge of American adults regarding annuities and social security. The financial planning vignette intervention is based on "consequence messaging" which asks listeners to consider the outcomes of different decisions within different situations, rather than asking listeners to make decisions with a lack of information. Intervention participants were randomly assigned to one of two treatment groups (received a video vignette or a written vignette) or a control group (received no vignette). The written and video vignettes contained the same content but were presented either through video or as text on a webpage. The vignettes highlighted a 62-year-old man speaking with his financial planner about budgeting for retirement. Among those that received the vignette, participants were randomly assigned to the annuity’s topic or the social security topic. In the valuing annuities vignette, the man is deciding whether to purchase an annuity. In the Social Security claiming vignette, the man is deciding when to claim his Social Security benefits.
Features of the Study
Study authors recruited a random sample of 2,150 Americans aged 30-70 to participate in the study. A total of 1,808 respondents completed the survey panel and were randomly assigned into treatment and control groups. The average age of the study sample was 52, over half were women (57%), and the majority were White (87%) with smaller percentages identified as Black (10%) or Hispanic (7%). A quarter of the sample had a high school education or less (25%), earned less than $30k/year (24%), and had an income greater than $100k (26%). The study used data from the Understanding America Study (UAS), an online survey panel that is representative of the U.S. population. The authors used statistical models to compare the outcomes of treatment and control group members.
Findings
Knowledge and skills for financial decision making
- The study found that participants in both the annuities and social security treatment conditions scored significantly higher than control group participants on the financial literacy quiz, with the vignettes increasing financial literacy related to these concepts by 10-15 percentage points.
- However, the study did not find significant differences in knowledge outcomes between the treatment groups (video vignette vs. written vignette); both were equally effective.
- The study did not find any significant differences between the groups in directionally correct advice (i.e., suggesting that larger annuities and later-life Social Security claims for healthy people, compared to sick people).
Causal Evidence Rating
The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the financial planning vignettes and not to other factors.