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Will investors change their superannuation fund given the choice?

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  • Tim Fry
  • Richard Heaney
  • Warren McKeown

Abstract

A large number of Australian investors have been granted the right to choose where their superannuation fund contributions will be invested, but it is difficult to ascertain whether investors will exercise this choice. Although expected-utility-maximizing investors might tend to change their fund once given the choice, loss averse investors would favour the status quo. Using a survey of over 1600 Australian investors, conducted by FinaMetrica in early 2005, we find support for inertia (status quo) in our sample suggesting that, with respect to superannuation choice, individual Australian investors are loss averse. Copyright (c) The Authors Journal compilation (c) 2007 AFAANZ.

Suggested Citation

  • Tim Fry & Richard Heaney & Warren McKeown, 2007. "Will investors change their superannuation fund given the choice?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 47(2), pages 267-283.
  • Handle: RePEc:bla:acctfi:v:47:y:2007:i:2:p:267-283
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    References listed on IDEAS

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    1. repec:eee:jeborg:v:145:y:2018:i:c:p:546-566 is not listed on IDEAS
    2. Su (Sally) Gan & Richard Heaney & Paul Gerrans, 2015. "Individual investor portfolio performance in retirement savings accounts," Australian Journal of Management, Australian School of Business, vol. 40(4), pages 652-671, November.
    3. Peter J. Phillips, 2011. "Will Self‐Managed Superannuation Fund Investors Survive?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 44(1), pages 51-63, March.
    4. Gerrans, Paul & Yap, Ghialy, 2014. "Retirement savings investment choices: Sophisticated or naive?," Pacific-Basin Finance Journal, Elsevier, vol. 30(C), pages 233-250.

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