National differences in the financial risk tolerance of financial planning clients.

This study provides policy makers and financial planners with key information to identify demographic traits that are associated with the financial risk tolerance (FRT) of financial planning clients in order to be able to target them appropriately. It explores international nationality differences and similarities in financial risk tolerance based on previously collected survey data, using logistic regression analysis. Data were obtained from 6 828 financial planning clients in Australia, the United Kingdom, the United States and South Africa. Each country's log-regression model contained seven independent variables (age, gender, education, income, marital status, number of dependants and net worth). The results revealed national differences in the financial risk tolerance, with a younger and predominantly male South African sample showing the highest financial risk tolerance. In all the countries, being young and male was associated with higher financial risk tolerance levels. In Australia and the United Kingdom, higher income levels were associated with higher levels of financial risk tolerance, while in the United States and South Africa, those with higher levels of net worth demonstrated higher levels of financial risk tolerance. In addition, in the South African sample those with higher levels of education had higher financial risk tolerance scores. The full multivariate model (n = 3 981), which included all demographic variables, revealed that higher financial risk tolerance levels are associated with younger, more educated South African males with both higher levels of income and accumulated net worth. [ABSTRACT FROM AUTHOR]