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March 8, 2016


Imagine you’re on a TV quiz show. The host turns to you and offers a list of topics, one of which is Your Personal Finances. Based on your knowledge, is this a category you would choose?

If you answered no, you’re not alone. Four out of five Americans admit they know more about a variety of topics than their own finances. That’s about the same share that would choose to answer questions about subjects far less personal, such as current events, entertainment, or science and technology.

These results were gathered as part of a research study, sponsored by Northwestern Mutual, to help gauge the American public’s overall financial knowledge – as measured by a financial IQ index – and its understanding of insurance products.

For me, the results were a powerful reminder of the reason I make it a point to help clients fully understand their personal finances, so they can make the informed choices that are right for them.

The survey found that some basic financial concepts are well-understood, including the best way to minimize losses in investments (88% answered correctly), asset allocation (79%), and dollar-cost averaging (57%). Likely because of their self-explanatory names, high numbers of Americans also recognize what disability income insurance and long-term care insurance are designed to do.

More often than not, however, Americans fail to understand many key financial concepts – like the average inflation rate over the past decade (known by about one in three), or the product that has traditionally mitigated inflation risk the best (less than one-third answered correctly). The lack of financial knowledge appears to be particularly acute when it comes to permanent life insurance, as only a small percentage of Americans seem to know even the basics of this type of risk protection.

Knowledge is power, though – and Americans recognize it. Nearly eight out of ten consumers feel the need to learn as much as possible about their personal financial situation. I’ve certainly seen this to be true in my practice.

As for where they find that information and whom they trust, I was glad to learn that, when asked to rate the reliability of several sources of financial information, Americans rated financial advisors as the most reliable source.

Are you curious what your financial IQ might be? Find out by completing the survey at

About the research

On behalf of Northwestern Mutual, independent research firm Mathew Greenwald & Associates, Inc. conducted an online survey of 1,664 Americans ages 25 to 65, between June 1 and June 8, 2010. Study participants were members of Synovate’s leading Global Opinion Panel. Survey data were weighted by gender, age, education, and household income to reflect the makeup of the U.S. population ages 25 to 65. Population statistics were based on data from the 2008 Current Population Survey.

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Article prepared by Northwestern Mutual with the cooperation of Brandon Matloff.

Brandon Matloff is a Wealth Management Advisor with Stella Oak Financial and Insurance Services.

Brandon Matloff is based in Los Angeles, CA. To contact Brandon Matloff, please call (213) 243-4495, e-mail at, or visit

Brandon Matloff

Stella Oak Financial and Insurance Services is a marketing name for Brandon Jeremy Matloff in their capacity as a representative of Northwestern Mutual and is not a legal business name. Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM) (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Brandon Jeremy Matloff is a Representative of Northwestern Mutual Wealth Management Company® (NMWMC) , Milwaukee, WI (fiduciary and fee-based financial planning services), a subsidiary of NM and federal savings bank. All NMWMC products and services are offered only by properly credentialed Representatives who operate from agency offices of NMWMC. Representative is an Insurance Agent of NM and Northwestern Long Term Care Insurance Company, Milwaukee, WI, (long-term care insurance) a subsidiary of NM, and a Registered Representative of Northwestern Mutual Investment Services, LLC (NMIS) (securities), a subsidiary of NM, broker-dealer, registered investment adviser and member FINRA ( and SIPC (



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