Retirement savings investment choices: Sophisticated or naive?
Document Type
Journal Article
Publisher
Elsevier
Faculty
Faculty of Business and Law
School
School of Business
Abstract
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.
DOI
10.1016/j.pacfin.2014.10.005
Access Rights
subscription content
Comments
Gerrans P., Ghialy, Y. (2014). Retirement savings investment choices: Sophisticated or naive?. Pacific Basin Finance Journal, 30(), 233-250. Available here