In this paper, we conduct a field experiment with a large sample of financial planner professionals in Canada to elicit factors which may influence client recommendations. Using repeated client vignettes, we find that recommendations are sensitive in expected ways to relative costs and benefits of particular products as well as client characteristics. We show that, in some domains, planners are more likely to recommend products they own themselves, their spouse owns, or they are licensed to sell. We provide evidence that product familiarity can negatively impact the quality of financial advice in specific situations. Finally, we find evidence for an effect of client involvement in the investment domain, but we do not find economically significant gender effects.

We show that financial knowledge is a key determinant of wealth inequality in a stochastic lifecycle model with endogenous financial knowledge accumulation, where financial knowledge enables individuals to better allocate lifetime resources in a world of uncertainty and imperfect insurance. Moreover, because of how the U.S. social insurance system works, better-educated individuals have most to gain from investing in financial knowledge. Our parsimonious specification generates substantial wealth inequality relative to a one-asset saving model and one where returns on wealth depend on portfolio composition alone. We estimate that 30-40 percent of retirement wealth inequality is accounted for by financial knowledge.