True Wealth launches the Financial Literacy Index – Significant gender differences

Zurich, 24.09.2024

The aim of the latest study by True Wealth in collaboration with the ZHAW School of Management and Law is to gain a better understanding of the Swiss population's financial and investment knowledge and to quantify it in an investment index.

There are significant differences in financial literacy by gender, income and education. Age also has an influence on financial literacy. The representative study reveals some surprising findings about specific knowledge about ETFs.

«Financial literacy is male and old.» summarizes Dr. Michael Kendzia, economist at the ZHAW School of Management and Law and member of the scientific advisor to the study on financial and investment literacy conducted in collaboration with True Wealth.

Men achieved an average financial literacy score of 58%, while women only achieved 45%. This gender gap runs through all the individual questions in the study.

Among those under 30, the figure is 49%, while it rises to 53% among those over 50.

The level of education has a significant statistical influence on financial literacy: with increasing formal education, the results of the respondents improve significantly: 35% in the lowest cohort compared to 62% among respondents with a tertiary education.

There is also a pronounced pattern in terms of income: People with low incomes get it right 39% of the time, while two-thirds of respondents with an income of CHF 15’000 or more answer correctly. The authors of the study attribute this, on the one hand, to the leeway that a higher income offers when investing. On the other hand, a higher income usually correlates with a higher level of education.

Switzerland at the top internationally

The survey, which consisted of ten individual questions, covered the core issues of financial literacy recognized in the scientific community – the «Big Three» (interest rates, inflation and diversification) – and added further questions.

Compared to other countries, Switzerland ranks well among the «Big Three», closely followed by Germany and Austria.

With an overall score of 51.7% (5.17 out of 10 questions were answered correctly on average), however, the general financial literacy of the Swiss population has room for improvement. Felix Niederer, CEO of True Wealth, comments: «Not everyone is interested in finance and investing. But if you don't know the most important principles of money and investing, you can't take responsibility for your financial well-being or effectively provide for the future. With the True Wealth Financial Literacy Index, we now have a tool to monitor the development of financial capability over time.»

The young are superior to their elders in one respect: The essential advantage of ETFs over actively managed investment funds, lower costs, was correctly recognized by one in three of the 30-49 year-olds, closely followed by the under-30s. However, the over-50s have the most knowledge on equities.

The representative survey was conducted by the market research institute GfK Switzerland on behalf of True Wealth in collaboration with the ZHAW School of Management and Law.

More information on the True Wealth Financial Literacy Index and the complete study results can be found at truewealth.ch/en/financial-literacy/2024.

You can test your own financial knowledge interactively and anonymously in the following quiz: truewealth.ch/financial-literacy/2024-quiz.

Methodology:

Representative survey (GfK eBUS®) conducted in August 2024, sample size 2’010 respondents aged 16 to 74, representative of the population in German- and French-speaking Switzerland. Ten questions with closed-ended answer options were asked on the topics of interest rates, inflation, diversification, risk capacity, risk-return ratio, herding effect, equities, bonds, cash and ETFs.

About True Wealth

True Wealth was founded in 2013 by Oliver Herren, co-founder of Digitec Galaxus AG, and Felix Niederer, a physicist and portfolio manager. The online platform has consistently automated all processes of modern asset management and offers customers domiciled in Switzerland a cost-effective wealth management solution starting from an investment amount of CHF 8’500 or CHF 1’000 for children's portfolios and investments in Pillar 3a.

The company manages more than CHF 1.5 billion in assets, spread across more than 25’000 clients.

The annual all-in asset management fee is 0.25-0.50%, depending on the investment amount. The management fee for Pillar 3a is 0%.

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