Investors' risk tolerance and return aspirations, and financial advisors' interpretations: A conceptual model and exploratory data

Many resources available to aid financial services professionals emphasize investment products rather than client characteristics. Financial advisors can use various resources to review quantitative details about investment products, for example, investor-clients’ previous investments, past performance of particular investment products, ratings of investment products presently available in the market place, and so on, but have little more than intuitive, subjective judgments as a basis for understanding clients’ investment needs and aspirations relevant to their investment decisions. In Etzioni’s terms, financial services professionals have a wide array of resources concerning “Logical/Empirical” (L/E) factors but comparatively few systematic techniques or guidelines for accurate assessment of clients’ “Normative/Affective” (N/A) attributes.(5*6’ The authors address these practical matters in the context of (a) Heider’s contention that scientific psychology can benefit from analysis of commonsense psychology beliefs, (b) person perception theory, and (c) problem solving

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