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Type: Journal article
Title: The decision to seek advice in the self-directed retirement fund industry
Author: Mihaylov, G.
Yawson, A.
Zurbruegg, R.
Citation: Applied Economics, 2015; 47(32):3367-3381
Publisher: Routledge
Issue Date: 2015
ISSN: 0003-6846
Statement of
George Mihaylov, Alfred Yawson and Ralf Zurbruegg
Abstract: This article examines the influence of investor knowledge and the cognitive bias that arises from overconfidence on the advice-seeking behaviour of investors managing their own retirement funds. Specifically, we trace whether overestimating one’s own technical and financial abilities can hinder the willingness to seek advice, particularly when it would be in the investors’ best interest to do so. We identify a subset of investors who are not knowledgeable and yet do not seek advice. These investors exhibit overconfidence in their ability to manage a fund, despite holding under-diversified and less sophisticated portfolios relative to their peers. Given the global rise in investors choosing to manage their own retirement funds and the importance of seeking advice in this context, there are direct policy implications from these results. They suggest a need to identify and target investors who display overconfidence since they are most likely to be managing underperforming retirement investments in the longer term.
Keywords: Overconfidence; literacy; pension plan; financial advice; investment decision
Rights: © 2015 Taylor & Francis
RMID: 0030025294
DOI: 10.1080/00036846.2015.1013620
Grant ID:
Appears in Collections:Business School publications

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