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Financial literacy is often measured with only three to five questions, suggesting challenges with achieving respectable levels of internal consistency reliability. Based on our review, we found financial literacy tests composed of three and five test questions yielded mean reliability estimates of 0.40 (k = 7; N = 167,075) and 0.54 (k = 8; N = 57,937), respectively: values less than minimally acceptable for even exploratory research. Based on our more comprehensive review of 52 samples and a variety of financial literacy tests (3–45 questions), researchers are recommended to measure financial literacy with a minimum of 13–15 questions. Finally, we conclude that the potential impact of financial literacy on various outcome variables has been underestimated substantially in many previous investigations, as the relatively low levels of internal consistency reliability in the financial literacy test scores attenuated the obtained effects estimated from the observed scores. [ABSTRACT FROM AUTHOR]

Superannuation funds heavily outsource key fund functions to service providers who play a crucial role in superannuation fund operations and affecting Australians' retirement savings. We examine the impact of related party service provider usage and trustee‐director affiliation on investment performance. We find that for‐profit funds significantly underperform when using related party service providers. The underperformance is more severe when the board is controlled by more affiliated trustee‐directors and belongs to a vertically integrated conglomerate group. Our results raise concerns about whether recent regulatory reforms increasing trustee‐directors' duties effectively address the conflicts of interest inherent in related party service provider arrangements. [ABSTRACT FROM AUTHOR]