Family Demographics Sway With a Role of Financial Advisor in Risk Tolerance and Investment Decision of Women Working in it Sector, Chennai

Abstract

Purpose: The purpose of this research is to analyse the influence of spouse and family members in addition to the crucial role of financial advisor in risk tolerance and investment decision of women working in IT sector. This study is conducted to observe, whether the women investors working in IT sector are reinforced by their family members and with the effective financial advise given financial advisors in tolerating risk and investment decision. Theoretical Framework: Savings are the funds set aside to face future contingencies or endowments planned by an individual with a precautionary motive. This habit of savings can be observed in all living creatures in the world and it is high in human beings. The reasons could be to maintain a luxurious life style and an exponential level of expectations about investments. Warren Buffet’s, “Save and Spend” principle followers are many in India when compared to the rest of the world. After migration to the urban world, women initiated supporting their family with additional income by starting her career. The herd behavior is observed among the young couples living in nuclear families towards spending and savings. Also, women started saving and investing separately and trying to maximize the returns. Methodology: Primary data for the study and analysis is collected through a structured questionnaire, prepared based on a review of the literature and tested through a pilot study. The pilot study was conducted by distributing 125 questionnaires to women executives from the IT companies in the sample area. Cronbach Alpha Test was used to determine the degree of consistency among the multiple measurements of each factor and found the overall score of 0.896 as reliable when compared to standard alpha above 0.7 is considered sufficient (George and Mallery, 2001; Pallant, 2005).On completion of the survey and collection of 604 datasheets, it is found that, 162 questionnaires in total found ineffectual due to errors of omission and dual entries, and 442 samples were found suitable for the study. Data analysis is carried out with the same. Three demographics of a family is considered for the study namely marital status, family type and working status of the spouse as close variable to family. T – test is conducted with the collected data and p value is observed to test the hypothesis. Findings: The results show that the role of financial advisors in risk tolerance and investment decisions of women are essential for the reliable and safe investments. The joint family system is not having a prominent influence in investment decision of working women as the existence of joint family system is in downtrend. The stimulating effect of spouse is also lesser when compared to financial advisors as the couple hardly find time to discuss exhaustively about the suitable investment strategies. Research, Practical and Social implications: Robust IT sectors’ 1/3rd of the employees are women with lucrative salaries. Their huge salaries are channelled properly to an investment mode with an effective guidance of financial advisors. The women investors are able to get a complete awareness by financial advisors about the current investment scenario and suggested with suitable investment option matches their investment objectives. A well designed financial literacy is given to the women investors that could help them in mitigating their risks while investing and maximising their returns. Government also systematically monitoring the role of financial advisors to protect the interest of the investors as the investors are primarily depending on them for their investment decisions. This helps to tap the funds required for industrious activities leading to the development of the economy. Originality / Value: Financial advisors essentially guide their clients with the adequate financial literacy and awareness. The financial advisors shall increase trustworthiness among their clients by continuously upgrading and upskilling themselves in the industry. A cautious approach would help to improve the risk tolerance level of women investors and there by develop a positive investment decisions in the near future.