Gender Stereotypes in Advisors' Clinical Judgments of Financial Risk Tolerance: Objects in the Mirror Are Closer than They Appear

A sample of 183 financial advisors and 290 advisory clients was used to determine the degree of correspondence between advisors' subjective clinical judgments about their clients' financial risk tolerance and the clients' actual financial risk tolerance. The correlation between the estimates and the actual measures was 0.41. It was further determined that advisors overestimated the risk tolerance of men and underestimated the risk tolerance of women. This distortion could not be attributed to income or wealth differences between the males and females.