Do Women Receive Worse Financial Advice?

Journal of Finance Forthcoming

HKUST Business School Research Paper No. 2020-007

103 Pages Posted: 24 Aug 2020 Last revised: 27 Sep 2023

See all articles by Utpal Bhattacharya

Utpal Bhattacharya

HKUST Business School

Amit Kumar

Singapore Management University - Lee Kong Chian School of Business

Sujata Visaria

Hong Kong University of Science & Technology (HKUST); City University London - Bayes Business School

Jing Zhao

Hong Kong Polytechnic University - School of Accounting and Finance

Multiple version iconThere are 2 versions of this paper

Date Written: December 17, 2020

Abstract

We arranged for trained undercover men and women to pose as potential clients and visit all 65 local financial advisory firms in Hong Kong. At financial planning firms, but not at securities firms, women were more likely than men to receive advice to buy only individual or only local securities. Women clients who signaled that they were highly confident, highly risk tolerant or had a domestic outlook, were especially likely to receive this suboptimal advice. Our theoretical model explains these patterns as the result of statistical discrimination interacting with advisors’ incentives. Taste-based discrimination is unlikely to explain the results.

Keywords: audit study, gender, financial advice, securities firm, financial planner, risk tolerance, confidence, geographic outlook

JEL Classification: D14, D91, G11, G24, G41

Suggested Citation

Bhattacharya, Utpal and Kumar, Amit and Visaria, Sujata and Zhao, Jing, Do Women Receive Worse Financial Advice? (December 17, 2020). Journal of Finance Forthcoming , HKUST Business School Research Paper No. 2020-007, Available at SSRN: https://ssrn.com/abstract=3671377 or http://dx.doi.org/10.2139/ssrn.3671377

Utpal Bhattacharya (Contact Author)

HKUST Business School ( email )

Clear Water Bay
Kowloon
Hong Kong

Amit Kumar

Singapore Management University - Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

HOME PAGE: http://www.amitkmr.com

Sujata Visaria

Hong Kong University of Science & Technology (HKUST) ( email )

Clearwater Bay
Kowloon, 999999
Hong Kong

City University London - Bayes Business School ( email )

United Kingdom

Jing Zhao

Hong Kong Polytechnic University - School of Accounting and Finance ( email )

Hung Hom
Kowloon
Hong Kong

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