How analytical is your financial advisor?
DOI:
https://doi.org/10.61190/fsr.v16i4.4895Keywords:
Risk preferences, Intertemporal choice, Cognitive Reflection Test, Financial advisorAbstract
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.
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