Assessment of financial competence

The decision as to whether an individual requires an administrator to manage some or all of his or her financial affairs is ultimately a legal decision. According to Australian law, this decision must be in the best interests of the individual, and must also be "the least restrictive alternative". The decision is usually based in part on reports or evidence provided by health-care professionals about the strengths and limitations of the person whose competence is in question. The problem is that currently in Australia there are no universally accepted definitions of financial competence, and no objective, uniform standards for assessing financial competence. The overall goal of the present study was to assess the validity and reliability of a measure of financial competence: the Financial Competence Assessment Inventory (FCAI). The FCAI demonstrated good reliability and validity when used with people with and people without cognitive impairment and was able to distinguish between people with and people without a financial administrator.