Overconfidence in financial planners

Authors

  • David M. Cordell Director of Finance Programs, The University of Texas at Dallas
  • Rachel Smith The University of Mississippi
  • Andy Terry Department of Economics and Finance, University of Arkansas at Little Rock

DOI:

https://doi.org/10.61190/fsr.v20i4.4709

Keywords:

CFP, CFA, Overconfidence

Abstract

Possessing limited knowledge can sometimes cause overconfidence in one's judgment and ability. This limited knowledge creates a "dual burden" because not knowing what we do not know robs us of the ability to recognize it. This research examines the dual burden phenomena by comparing two groups of financial professionals, one group that has earned one certification with another group that has earned the first certification plus a second certification that requires greater depth of knowledge in a specific area, implying greater skill. We find that financial professionals in the less skilled group are actually more confident in their investment and portfolio management skills than those in the more skilled group.

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Published

2011-12-31

How to Cite

Cordell, D. M., Smith, R., & Terry, A. (2011). Overconfidence in financial planners. Financial Services Review, 20(4), 253–263. https://doi.org/10.61190/fsr.v20i4.4709

Issue

Vol. 20 No. 4 (2011): FSR Winter 2011

Section

New Original Submission

License

Copyright (c) 2011 Academy of Financial Services

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