How analytical is your financial advisor?

Authors

  • John R. Nofsinger Department of Finance, College of Business, Washington State University
  • Abhishek Varma Department of Finance, College of Business, Washington State University

DOI:

https://doi.org/10.61190/fsr.v16i4.4895

Keywords:

Risk preferences, Intertemporal choice, Cognitive Reflection Test, Financial advisor

Abstract

We survey over 100 financial planners to assess their reasoning mode, intertemporal choices, risk aversion and preferences, and framing focus. Using the Cognitive Reflection Test, we find that financial planners are more analytical than the general population. Further tests show that the analytical planners are more financially patient and perform better in intertemporal choice problems. These attributes seem important to successful financial planning. Intuitive thinkers were more risk averse and behave more according to the axioms of prospect theory. One-third of our planners were fooled by the framing of a question.

Downloads

Published

2007-12-31

Issue

Vol. 16 No. 4 (2007): FSR Winter 2007

Section

New Original Submission

License

Copyright (c) 2007 Academy of Financial Services

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Author(s) retain copyright and grant the Journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial 4.0 International License that allows to share the work with an acknowledgment of the work's authorship and initial publication in this Journal.

This license allows the author to remix, tweak, and build upon the original work non-commercially. The new work(s) must be non-commercial and acknowledge the original work.

How to Cite

How analytical is your financial advisor?. (2007). Financial Services Review, 16(4), 245-260. https://doi.org/10.61190/fsr.v16i4.4895