Researchers at Prudential Financial Inc. have developed a test that may help identify near retirees and recent retirees who are interested in variable annuities that come with performance guarantees.
The researchers at Prudential, Newark, N.J., worked with researchers at the University of Connecticut to develop a Retirement Emotion Quotient survey, then gave the survey to 1,008 U.S. residents in what Prudential calls the “Retirement Red Zone” – the period that starts 5 years before retirement and ends 5 years after retirement.
The researchers came up with a simplified, 12-question survey that can determine how much fear, regret, inertia, aggressiveness and susceptibility affect a Red Zone consumer’s investment decisions, according to a research report that describes the Emotional Quotient study results.
Scores on the final, 12-version Emotional Quotient survey can range from 14 to 66, with higher scores correlating with what the researchers believe to be a higher level of “behavioral risk,” or a tendency to let emotions guide investment decisions.
Results for the men and women in the calibration pool were similar, and participants were more likely to be conservative than to be aggressive.