Many investors think they know more than they do about their money.

When given a basic financial literacy test, investors scored a rather dismal average of 61 percent correct answers, according to State Street Global Advisors. However, the nearly two-thirds of the same investors (63 percent) considered themselves “advanced” when it comes to financial knowledge.

This disconnect provides advisors with an opportunity to help clients and at the same time it helps advisors build a stronger relationship with the clients and their families, says Brie P. Williams, head of practice management at State Street Global Advisors.

“Financial literacy is the ability to use knowledge and skills to manage one’s resources effectively for a lifetime of security,” says Williams. “Yet, at a time when individuals are more responsible than ever for their financial future, their understanding of basic financial concepts is dangerously inadequate.”

Advisors can take several steps to improve their clients’ financial literacy, she says.

Advisors need to take the initiative in engaging their clients and the clients’ families in financial education. Half of families do not talk about wealth management.

When possible, younger advisors should be assigned to younger investors to encourage more rapport.

Advisors should teach and reinforce what investment success is for their clients: long term goals need to be stressed rather than letting clients concentrate on impossible goals such as never sustaining any investment losses.

When clients are first learning about finances, advisors should not talk in extreme detail, which the client may not understand at that point. Instead, talk in higher level concepts, such as establishing good spending habits.

“Efforts to improve financial literacy levels can provide significant benefits to advisory practices and to the clients,” says Williams. “Research shows that financially knowledgeable investors are more likely to engage the services of a financial advisor, and tend to stick to their financial plans over the long haul.”

“Education can be a key component of your value proposition. Investors are interested in working with a financial advisor who is a comfortable and reliable sounding board for their financial life—someone they can have a conversation with to help inform them of their options and align their investment decision-making with their goals,” she adds.

Investors who scored above 70 percent on the financial literacy test have average investments of 46 percent in equities, while those who scored less than 70 percent only had 28 percent of their funds invested in equities.

At the same time, those scoring higher had less money held in cash than those with poorer scores.

“Knowledge leads to empowerment and better planning,” says Williams. “Those with financial literacy also stick to their plans over the long term and their engagements with their advisors are stronger.”