Gender, Risk Tolerance, and False Consensus in Asset Allocation Recommendations
44 Pages Posted: 27 Oct 2017
Date Written: October 18, 2017
We study the impact of gender on asset allocation recommendations. Graduate business students and professional wealth managers are randomly assigned a male or female client. Participants recommend an allocation and choose an allocation for themselves. Male students choose a riskier allocation than female students, consistent with existing evidence of a gender difference in risk tolerance, and recommend a riskier allocation. In contrast, male and female wealth managers choose and recommend the same allocation, indicating that male and female finance professionals feature similar risk preferences. In both samples, a subject’s allocation choice is the strongest predictor of the recommendation provided.
Keywords: Risk Tolerance, Gender, Asset Allocation
JEL Classification: D14, G02, G11
Suggested Citation: Suggested Citation