Discussions on long-term financial choice

Kuan Kiat Cheah, F. Douglas Foster, Richard Heaney, Timothy Higgins, Barry Oliver, Terence O'Neill, Roslyn Russell

Research output: Contribution to journalArticleResearchpeer-review

14 Citations (Scopus)
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Abstract

We analyse focus group discussions about long-run (retirement) financial decisions, and explore the extent to which participant responses are related to the oft-used behavioural explanations of financial choice. We find that persons of all ages understand the importance of long-term savings, but face many challenges in preparing for retirement. There is mixed support for a range of associated behavioural explanations. Complexity, relevance of decisions, and uncertainty come up repeatedly in all focus groups, irrespective of the age of the participants. The use of heuristics, confidence, costs of mistakes, mental accounting, and the importance of social interaction appeared of less immediate relevance to all groups. We discuss the implications of these findings for how the financial services and superannuation industries communicate with members. There appears to be a general view from the focus groups that breaking large, complex retirement decisions into more manageable pieces (based on personal circumstances) and providing more focused and relevant information to investors would result in more effort and care expended on retirement decisions.

Original languageEnglish
Pages (from-to)414-434
Number of pages21
JournalAustralian Journal of Management
Volume40
Issue number3
DOIs
Publication statusPublished - 24 Aug 2015

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Retirement
Focus groups
Confidence
Social interaction
Heuristics
Savings
Industry
Financial services
Investors
Costs
Financial decisions
Superannuation
Uncertainty
Mental accounting
Focus group discussion

Cite this

Cheah, K. K., Foster, F. D., Heaney, R., Higgins, T., Oliver, B., O'Neill, T., & Russell, R. (2015). Discussions on long-term financial choice. Australian Journal of Management, 40(3), 414-434. https://doi.org/10.1177/0312896214532476
Cheah, Kuan Kiat ; Foster, F. Douglas ; Heaney, Richard ; Higgins, Timothy ; Oliver, Barry ; O'Neill, Terence ; Russell, Roslyn. / Discussions on long-term financial choice. In: Australian Journal of Management. 2015 ; Vol. 40, No. 3. pp. 414-434.
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Cheah, KK, Foster, FD, Heaney, R, Higgins, T, Oliver, B, O'Neill, T & Russell, R 2015, 'Discussions on long-term financial choice' Australian Journal of Management, vol. 40, no. 3, pp. 414-434. https://doi.org/10.1177/0312896214532476

Discussions on long-term financial choice. / Cheah, Kuan Kiat; Foster, F. Douglas; Heaney, Richard; Higgins, Timothy; Oliver, Barry; O'Neill, Terence; Russell, Roslyn.

In: Australian Journal of Management, Vol. 40, No. 3, 24.08.2015, p. 414-434.

Research output: Contribution to journalArticleResearchpeer-review

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Cheah KK, Foster FD, Heaney R, Higgins T, Oliver B, O'Neill T et al. Discussions on long-term financial choice. Australian Journal of Management. 2015 Aug 24;40(3):414-434. https://doi.org/10.1177/0312896214532476