Abstract We investigate the separate and joint influences of social engagement measures on stock market participation and find that socially engaged individuals are more likely to participate. Consistent with Granovetter’s theory of social networks we find that a weak tie (measured by social group involvement) has a positive effect on stock market participation whereas a strong tie (measured by frequency of talking to neighbors) has no effect. More trusting individuals are more likely to participate in the stock market, as are those who identify with a political party. In contrast, the degree to which religion is important appears to have little impact.

We investigate how savings goals relate to wealth allocation and how this relationship is moderated by financial advice and numerical ability. Using panel data from a large household survey we find that as the number and the time horizon of savings goals increases, portfolios shift from safe assets to both fairly safe assets and risky assets. We also find that households with access to multiple sources of financial advice and independent financial advice hold more fairly safe and risky assets and that independent financial advice enhances the influence of savings goals on wealth allocation to fairly safe and risky assets. Overall we find that the possession of savings goals is associated with long term saving activity, and this is particularly evident for those with low levels of numerical ability. By enabling the formation of savings goals, the financial planning process can facilitate long-term investment in risky assets.