Personal accounts: restricted investment choice

That is the conclusion in today’s White Paper on personal accounts. Much of the reasoning is based on consumer research, but also on experiences in countries such as the US and Sweden, where accounts similar to those now proposed for the UK have shown how individuals act in ways contrary to their financial good. For example, evidence on asset allocation suggests many people adopt a naïve strategy. “Some heavily base their decisions on funds’ previous returns, and others concentrate their assets in their own employer’s shares, mistakenly viewing them as safer,” the document states in Chap...