Retirement Savings Trajectories: An Analysis of the Experience of Fund Members, Part Two: Individual and Peer Moderation Effects on Member Investment Choice

PAUL GERRANS, UNIVERSITY OF WESTERN AUSTRALIA, MARIA STRYDOM, MONASH UNIVERSITY, CARLY MOULANG, MONASH UNIVERSITY, JUN FENG, MONASH UNIVERSITY, GORDON CLARK, OXFORD UNIVERSITY

02 November 2016

This paper explores the role of peers in a member’s propensity to make a change to their retirement savings investment strategy. Given that evidence indicates that the majority of individuals do not seek professional financial advice, we investigate whether workplace peers may be influential in member retirement savings investment strategy behaviour. We explore three ways a peer influence may manifest. First, we examine whether the likelihood that an individual makes an investment strategy change is related to what their sub-plan peers do. Second, we explore whether the concentration of one gender in a sub-plan is associated with the individual member’s likelihood of changing investment strategy. Third we explore if the previously documented gender effect, specifically the over propensity to trade among males, is moderated by the gender critical mass of a worker’s retirement savings plan peers.*

*We would like to acknowledge the invaluable research assistance of Jacqui Whale, UWA Business School.