Financial knowledge, for the purposes of the study, was defined as:

"The ability to make informed judgements and to take effective decisions regarding the use and management of money."

Source: Schagen, S. "The Evaluation of NatWest Face 2 Face With Finance": NFER, 1997.

Also used in "ANZ Survey of Adult Financial Literacy in Australia" report by Roy Morgan Research, May 2003 (this definition was adopted from UK and Australian research with a view to international consistency).

The main objectives of the survey were to:

• Identify areas of low financial knowledge, by topic and population, and to assist educators to improve literacy in those areas.
• Develop benchmark measures of financial knowledge across the entire adult population and key segments so that trends can be measured and programmes targeted at areas of need.
• Assist the financial services industry to identify which aspects of financial skills, products or services are causing the greatest problems for New Zealanders and thus improve design or communication.

The survey also provided the Ministry of Economic Development with information to:

• Develop law reform programmes that provide effective consumer protection and address real issues facing individuals.
• Identify participation rates, investment behaviours, habits and level of sophistication of retail consumers in New Zealand's securities market. Results specific to these objectives are reported on page 11.