Individual investor portfolio performance in retirement savings accounts

Gan, Su (Sally); Heaney, Richard; Gerrans, Paul

doi:10.1177/0312896214528187

Cited by 9 publications

(4 citation statements)

References 77 publications

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“…(), Gerrans and Yap () and Gan et al . () on the financial literacy of (Australian) pension plan participants suggests various challenges in this regard. The results of our study add to this collection of work by suggesting that individuals likely have difficulties grasping the concept of (financial) risk, at least in the way that it is typically operationalised in finance theory and the financial industry.…”

Section: Conclusion and Discussionmentioning

confidence: 99%

How return and risk experiences shape investor beliefs and preferences

Hoffmann

Post

2015

Accounting & Finance

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negatively impact risk perceptions. Realized risk, however, has no effect. That is, even in a highly volatile stockmarket period in which risk appears very salient, investors do not take it into account when updating their beliefs and preferences. This research would not have been possible without the help of a large brokerage firm. The authors thank this broker for making available its data and its employees for answering numerous questions. The authors thank the editor, Tom Smith, the deputy editor, Gary Monroe, and two anonymous reviewers for their constructive guidance through the review process. For their comments on earlier drafts of this paper and helpful discussions, the authors thank Brad Barber, Jaap Bos, Jingjing Chai, John Chalmers, Prachi Deuskar, Simon Gervais, David Hirshleifer, Cars Hommes, Matti Keloharju, Marc Kramer, Christoph Merkle, Elias Rantapuska, Paul Smeets, Stefan Straetmans, Richard Taffler, Cesira Urzi, Mei Wang, and seminar and conference participants at the University of New South Wales, Maastricht University, the University of Amsterdam, the University of Münster, the Goethe-University Frankfurt, the Colloquium on negatively impact risk perceptions. Realized risk, however, has no effect. That is, even in a highly volatile stockmarket period in which risk appears very salient, investors do not take it into account when updating their beliefs and preferences.3

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Section: Conclusion and Discussionmentioning

confidence: 99%

How return and risk experiences shape investor beliefs and preferences

Hoffmann

Post

2015

Accounting & Finance

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“…While moving away from the default asset allocation may not necessarily improve long‐term gains (Cronqvist and Thaler ; Gan, Heaney, and Gerrans ), this behavior reflects active matching of the asset allocation with the preferences of the individual; hence, we label it positive engagement.…”

mentioning

confidence: 99%

Engagement with Retirement Savings: It Is a Matter of Trust

Deetlefs¹,

Bateman²,

Dobrescu³

et al. 2018

Journal of Consumer Affairs

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People who engage with their retirement savings are more likely to opt out of unsuitable defaults. We use cluster analysis of matched survey and administrative data to identify groups of pension plan members that are alike in their attitudes toward retirement saving. We find that engaged and disengaged members segregate into groups based on their interest and trust. Group membership in turn helps predict plan engagement, as proxied by nondefault choices. Specifically, engagement is stronger among interested groups. Trust, however, has a more complex relationship with engagement, particularly as it interacts with interest. While members with low interest and high trust are less likely to engage (e.g., by not checking plan performance), less trusting members engage more (e.g., by actively choosing asset allocations). As interest and trust successfully determine group membership, and ultimately engagement, pension plan providers should address members' diverse needs and circumstances with personalized approaches.

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“…Capital stable, Conservative Balanced, Balanced, etc. ; Global companies in Asia (7). If multiple items are indicated, we assume equal weights and take the average score.…”

Section: Appendix: the Survey Instrumentmentioning

confidence: 99%

“…Reference [18] finds that, during the global financial crisis of 2007-2009 the majority of fund members did not change their investment strategies; furthermore, those who did change their investment strategies reduced their exposure to equity when the market was at its lowest, thus locking in losses. In addition, some research also finds that individuals who are the most active in investing in discretionary Australian superannuation products perform worse than their peers [7]. It is, therefore, important to further explore whether complexity and uncertainty drive key decisions by members.…”

Section: Introductionmentioning

confidence: 99%

Complexity and Uncertainty regarding Superannuation Do Not Explain Key Decisions Taken by Members

Avkiran¹,

Zhu²

2018

TEL

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Superannuation in Australia represents the largest investment in the country in the managed funds industry. Yet, people without appropriate qualifications are required to make financial decisions for their future under government legislation. We capture complexity and uncertainty as a way of explaining key decisions, using partial least squares structural equation modelling (PLS-SEM). Complexity explains key decisions more than uncertainty. Based on the answers given to open-ended questions, members are at a loss to make key decisions for their future, partly due to the non-transparency of superannuation and changing government rules.

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Individual investor portfolio performance in retirement savings accounts

Cited by 9 publications

References 77 publications

How return and risk experiences shape investor beliefs and preferences

How return and risk experiences shape investor beliefs and preferences

Engagement with Retirement Savings: It Is a Matter of Trust

Complexity and Uncertainty regarding Superannuation Do Not Explain Key Decisions Taken by Members

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