Financial education and asset allocation

We conduct a clinical study on a firm that restructures its 401(k) plan and simultaneously offers financial education seminars to its employees. The restructuring requires each employee to restate allocation percentages, thus we are able to analyze the specific benefits of retirement planning seminars on the asset allocation decision. We find that seminar attendance is associated with increased portfolio diversification and improved risk management. When combined with changes in return, the overall result is that seminar attendees create more efficient portfolios, which implies a better understanding of the retirement planning process.