Will investors change their superannuation fund given the choice?

To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1467-629X.2006.00203.x Byline: Tim Fry (a), Richard Heaney (a), Warren McKeown (a) Keywords: Choice of fund; Prospect theory; Superannuation Abstract: 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. Author Affiliation: (a)School of Economics, Finance and Marketing, RMIT University, Melbourne, 3000, Australia Article History: Received 11 April 2006; accepted 31 May 2006 by Robert Faff (Editor)