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Do Women Receive Worse Financial Advice? An Audit Study in Hong Kong, China

Author

Listed:
  • Bhattacharya, Utpal

    (Department of Finance, Hong Kong University of Science and Technology)

  • Kumar, Amit

    (Department of Finance, Singapore Management University)

  • Visaria, Sujata

    (Department of Economics, Hong Kong University of Science and Technology)

  • Zhao, Jing

    (Hong Kong Polytechnic University)

Abstract

We arranged for trained undercover men and women to pose as potential clients and visit all 65 local financial advisory firms in Hong Kong, China. At financial planning firms, but not at securities firms, women were more likely than men to receive advice to buy only individual or only local securities. Female clients who signaled that they were highly confident, highly risk tolerant, or had a domestic outlook, were especially likely to receive suboptimal advice. Our theoretical model explains these patterns as the result of statistical discrimination interacting with advisors’ incentives. Taste-based discrimination is unlikely to explain the results.

Suggested Citation

  • Bhattacharya, Utpal & Kumar, Amit & Visaria, Sujata & Zhao, Jing, 2023. "Do Women Receive Worse Financial Advice? An Audit Study in Hong Kong, China," ADB Economics Working Paper Series 684, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0684
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    More about this item

    Keywords

    audit study; gender; financial advice; securities firm; financial planner; risk tolerance; confidence; geographic outlook;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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