Abstract

available at www.financialengines.com. We would also like to thank to Michael Falk CFA, Carl Londe, and Tony Sabos of ProManage, Inc. (formerly, Strategic Financial Concepts, Inc.) for providing us access to the ProManage PROgram TM. Information about ProManage is available at www.promanageplan.com. In addition, we are grateful to Tom Koelbl of SwedishAmerican Health System for letting us conduct surveys at SwedishAmerican Health Systems. How Much Is Investor Autonomy Worth? There is a worldwide trend towards increasing investor autonomy. Investors are increasingly able to pick their own portfolios. How good a job are they doing? We present individuals saving for retirement with information about the distribution of outcomes they could expect from the portfolios they picked and also the median portfolio selected by their peers. A majority of our survey participants actually prefer the median portfolio to the one they picked for themselves. Furthermore, we find that a majority of investors who preferred to form their own portfolio rather than accept one that was picked for them by a professional investment manager, preferred the distribution of returns implied by the suggested portfolio to the one they selected on their own. We investigate various alternatives to these findings and offer some evidence to support the view that part of the results are attributable to the fact that investors do not have welldefined preferences. 1.

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