Do Financial Advisors in Hong Kong Take Women as Fools?
A two-year academic study by a Hong Kong university found that women in Hong Kong are more likely to be pushed by financial consultants into riskier investments than men with similar appetites.
The study, conducted by the Hong Kong University of Science and Technology (HKUST), found that 37 percent of women were directed towards undiversified investment like individual stocks, complex and real estate investment trusts. When faced with the opposite gender, consultants directed just 14 percent of them to such strategies.
Women were also advised to invest more in domestic assets than global assets compared to men.
Results were based on two years of data collected from 32 mystery shoppers – half men, half women – posing as potential clients in Hong Kong. Each mystery shopper was randomly assigned one of three traits: high or low risk tolerance; high or low self-confidence; and preference for domestic or international investments.
Fooling Around
According to Utpal Bhattacharya, co-author of the study and a finance professor at HKUST, women were targeted due to lower perceived financial literacy and the belief that they could be exploited for higher commissions without being called out for bad advice.
«Advisers think they can fool the women and get away with selling them advice with sub-par results,” he said in a «Bloomberg» report. «This is what we call statistical discrimination.»
