Risk Taking in the Context of Financial Advice: The Issue of Gender Identity

Abstract

We test a gender threat hypothesis whereby having a financial advisor of the opposite gender results in gender stereotypical risk attitudes. We employ a unique dataset of 1,621 advised UK investors, combined with information on the gender of their financial advisors. Confirming the hypothesis, our results show that men advised by a woman take more risk than when advised by a man. Women advised by a man adopt a more cautious approach than when advised by a woman. When the gender threat is alleviated, we found no gender gap in risk-taking.

Keywords: Behavioural finance, Portfolio choice, Attitude to risk, Gender, Financial advice, Identity.

JEL Classification: G4, G20, G40, D14, J16