Need advice about money? You might be better off not asking an expert.
So suggests a new study that found, among other things, that people with low financial acumen tend to learn more and make better decisions about money if they solicit advice from peers who have similar levels of financial knowledge rather than people who are more financially sophisticated.
Using a sample of 263 undergraduate students at the University of Birmingham in England–more than 50% of whom couldn’t answer three standard financial literacy questions–researchers found that subjects with little understanding of compound interest were more knowledgeable after seeking guidance from a peer who was similarly uninformed as opposed to someone possessing more financial savvy.
While this finding might seem counter intuitive, it makes sense on an interpersonal level, as communication is more effective between people who can appreciate each other’s gaps in knowledge and reasons for misunderstanding, says Sandro Ambuehl, a co-author of the study and an assistant professor at the University of Toronto’s Rotman School of Management.