Fear of Negative Evaluation, Culture, Gender, and Financial Welfare

This paper examines whether financial consumers are able to challenge and reject offers and suggestions from financial advisors. Survey data of Korean financial consumers shows that only 11% of the participants answered that they are completely able to ask the questions they want to ask to financial advisors about financial products and services they are considering, and only 30% answered that they are able to reject offers and suggestions by financial advisors. Many subjects attributed fear of negative evaluation as the reason for not asking questions, i.e., to be seen polite and knowledgeable. Furthermore, controlling for education andage effects, female subjects tend to reject others’ offers and suggestions significantly less than male subjects in financial settings. This could result in suboptimal financialwelfare forwomen. This paper attempts to provide explanations by addressing the notions of fear of negative evaluation and social value constructs of politeness and obedience imposed in Confucian cultures particularly for women, as well as the social value constructs of the ‘good girl’ making it more difficult for women to hold their hands up and say no to others.