Choosing today for tomorrow: The insurance agent’s influence over the choice of pension savings track

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Choosing a retirement plan is one of the most important economic decisions people make in their lifetime. Under Israel’s pension marketing policy, a pension plan is generally chosen at a meeting with an insurance agent, who may be subject to a conflict of interests. In this study, 263 participants were asked to choose a savings plan after meeting with an insurance agent who provided information about two different plans and then proceeded to recommend one of them. The study examined whether the tendency to choose a particular plan is related to the insurance agent’s recommendation, to the fair disclosure statement provided by the agent and the decision maker’s degree of financial literacy. It was found that the agent’s recommendation had a decisive effect which was not offset by fair disclosure. Furthermore, it was found that the agent’s influence was moderated by a high degree of financial literacy when managers’ insurance was recommended. Yet, the agent’s recommendation remained significant, as expressed in the intention to choose a different plan from the one chosen by a control group that did not meet with the agent. The results of the study indicate that the insurance agent exerts considerable influence, and they confirm that transparency and knowledge do not counterbalance the insurance agent’s strong influence over the recipients of the advice. This influence may be abused when the interests of the agent and the consumer are not aligned.

Original languageEnglish
Pages (from-to)23-42
Number of pages20
JournalIsrael Economic Review
Issue number1
StatePublished - 1 Jan 2016

ASJC Scopus subject areas

  • General Economics, Econometrics and Finance


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