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The purpose of this paper is to explore the relationship between consumers’ subjective and objective financial literacy (OFL) – the necessary knowledge and skills to make effective personal financial decisions – and their effects on opinion leadership and the use of retail financial services.

In total, 486 US participants were surveyed. The demographical profile of the sample roughly resembled that of the USA population.

On average, consumers with moderate levels of OFL report lower subjective financial literacy (SFL) compared to those with low or high levels of OFL. Moreover, while SFL and opinion leadership are positively correlated, consumers with moderate levels of OFL reported lower opinion leadership compared to those with high or low levels of OFL. The paper introduces financial literacy miscalibration as the discrepancy between consumers’ objective and SFL. Financially illiterate respondents who perceived themselves as financially knowledgeable reported high opinion leadership. Finally, a greater percentage of financially – literate consumers reported owning checking and savings accounts, using online and mobile banking for diverse purposes, and making fewer phone calls to customer services, compared to others.

The paper integrates literature from financial literacy, consumer knowledge, and opinion leadership to explain these findings and to further enhance our theoretical and empirical understanding of objective vs SFL.

The discrepancies between objective and SFL may significantly influence consumers’ financial decisions and the degree to which they expose themselves to the pertinent risks. The paper discusses implications for public policy makers as well as marketing managers and researchers.

The study is the first to empirically explore the research questions following the conceptual development.