Young Professionals? Intentions To Make Use Of Financial Planning Services: A South African Perspective

The global financial crisis coupled with an increase in life expectancy, declining working age population and economic pressures have heightened the need to be active in analysing financial resources. In South Africa, national and global economic pressures, rising health care costs and other societal factors have caused the vast majority of the population to remain underprepared financially. Young professionals are ideally positioned to combat these pressures, due to the benefits of having a longer time horizon to save and invest. However, research has shown that young professionals fail to take advantage of financial planning services early enough in life. Therefore the purpose of this study was to investigate the factors influencing the intentions of young professionals? to make use of financial planning services. From the literature, four factors were identified, namely Financial goals and objectives, Financial knowledge, Role of a financial planner and Personal circumstances. A measuring instrument, in the form of a self-administered questionnaire, was distributed to 350 respondents residing in the Eastern and Western Cape provinces of South Africa. The data collected yielded 284 usable questionnaires which were subjected to various statistical analyses. An exploratory factor analysis was undertaken and Cronbach?s alpha coefficients were calculated to assess the validity and reliability of the measuring instrument respectively. Descriptive statistics were calculated to summarise the sample data and the hypothesised relationships were assessed by means of multiple regression analysis. The results of this study show that Financial goals and objectives, Role of a financial planner and Financial knowledge were found to have a significant influence on the Intentions to make use of financial planning services. Based on the results the study, recommendations and suggestions for further research were provided.