Smarty Pants?

The market uncertainty and volatility since late 2007 has cemented the argument that investing is not as simple as it may have appeared in the bull days preceding the financial crisis.

With this in mind CoreData has launched the first national Financial IQ Test this week to gauge how smart Australians really are when it comes to managing their finances?

Essentially the tool provides Australians with a better appreciation of their relationship with money and how they compare to other people when it comes to their understanding and approach to all things financial.

To take the test, use the following link http://www.coredata.com.au/limesurvey/index.php?sid=93225&lang=en

Similarly to Intelligence IQ tests, the distribution among the population is relative to the positioning of all those covered.

An initial view of the early stage data and a sample of 1,158 reveals Australians generally self-classify themselves as having reasonable levels of investment knowledge and experience with only around a quarter self diagnosing themselves with poor or very poor knowledge and experience.

Confidence does not appear to be a problem with two-thirds (67.5%) being confident or very confident in dealing with their greatest financial concerns.

Having said that, when an assessment is made of Financial IQ levels, using a series of carefully constructed questions, it becomes apparent that confidence is not necessarily warranted.

Nonetheless Australians do admit to requiring more assistance in order to better understand specific finance related topics.

The initial data set shows that tax (minimisation/strategies/planning) is the primary matter they would like a better grasp of, with 43.4% identifying it.

Investing (39.2%) is the second most popular area consumers would like to improve their knowledge of.

Less important knowledge seeking matters for the population as a whole were saving for a specified goal (e.g. a home deposit or major purchase) (8.48%), regular saving and budgeting (13.7%) and paying off loans (15.7%).