Retirement savings investment choices: Sophisticated or naive?

Paul Gerrans, G. Yap

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

© 2014 Elsevier B.V. We assess investment sophistication in a large sample of auto-enrolled, retirement plan member choices. A strong preference for using a small number of investment options is provided with little evidence, overall, to support equally weighted allocations. However, when multiple options are selected, one-third are equally weighted allocations and this is more prevalent when an easily divisible number of options are used. Positive learning is suggested in patterns of choices with sophisticated choice more likely in later choices. Possible consequences of menu framing, specifically menu size, do not support influence on effective asset allocations.
Original languageEnglish
Pages (from-to)233-250
JournalPacific Basin Finance Journal
Volume30
DOIs
Publication statusPublished - 2014

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Retirement saving
Investment choice
Saving-investment
Menu
Retirement
Asset allocation
Sophistication

Cite this

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title = "Retirement savings investment choices: Sophisticated or naive?",
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Retirement savings investment choices: Sophisticated or naive? / Gerrans, Paul; Yap, G.

In: Pacific Basin Finance Journal, Vol. 30, 2014, p. 233-250.

Research output: Contribution to journalArticle

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AB - © 2014 Elsevier B.V. We assess investment sophistication in a large sample of auto-enrolled, retirement plan member choices. A strong preference for using a small number of investment options is provided with little evidence, overall, to support equally weighted allocations. However, when multiple options are selected, one-third are equally weighted allocations and this is more prevalent when an easily divisible number of options are used. Positive learning is suggested in patterns of choices with sophisticated choice more likely in later choices. Possible consequences of menu framing, specifically menu size, do not support influence on effective asset allocations.

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JO - Pacific Basin Finance Journal

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