POWERED BY MOMENTUM MEDIA
(April-2003) Choice means procrastination
Giving members more investment choice just increases their tendency towards procrastination, says Meredith Brooks, global head of institutional business for the Frank Russell Company.
“There is overwhelming evidence to show that people do not exercise choice,” she says. “They like the idea of having more choices, but they don’t do much with it.”
Brooks, who is based in the US but recently visited Australia, says large US funds offer members over 30 choices, but less than four of these choices are used. In contrast, small plans offer around 20 choices and about five are used.
A behaviour finance study also found that the more choices that are offered, the more people spread their existing money among these choices. Brooks believes that not more than 10 investment choices are needed to cater for most people’s needs.
AUTHOR
Zilla Efrat
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