Big Five Personality Traits and Financial Risk Tolerance among ‎Retail Investors: A Systematic Literature Review

  • Authors

    • Jyotsna Khaitan Research Scholar, K. R. Mangalam University, Haryana, India
    • Dr. Divya Singh Assistant Professor K. R. Mangalam University, Haryana, India
    https://doi.org/10.14419/bv72nr69

    Received date: July 8, 2025

    Accepted date: August 29, 2025

    Published date: October 5, 2025

  • Big Five Personality Traits; Neuroticism; Agreeableness; Openness to Experience; ‎Conscientiousness; Extraversion; Financial Risk Tolerance; Retail Inves-tors.

  • Abstract

    Purpose: This paper studies the impact of Big Five personality traits on the financial risk tolerance ‎of retail investors. The big five taxonomy model includes dimensions of neuroticism, ‎agreeableness, openness to experience, conscientiousness, and extraversion traits. These traits ‎can change the risk tolerance level of individuals in terms of their investment decisions. This ‎paper analyses all the research conducted on this relationship. The stockbrokers and fund ‎managers can benefit from the results as they advise on personalized investment strategies ‎and risk management practices. These drivers also impact broader market trends and lead to ‎instabilities. So, this study is crucial for financial advisors, investors, and policymakers.‎

    Design/methodology/approach: The author has conducted a systematic literature review to ‎identify existing relevant work from various authors who have studied the relation between ‎Big Five personality traits and risk tolerance in retail investors. This paper includes literature ‎from 2000 to 2025. Most authors have used a survey to calculate personality traits and risk ‎tolerance; few have used buying and selling data. ‎

    Findings: The findings show a significant impact of personality traits on investors' investment ‎decisions and risk-taking behaviour. Most of the traits have a significant relation and a few ‎have an insignificant relation with the financial risk tolerance of retail investors.‎

    Practical implications: Retail investors should make investment decisions after taking ‎into account the influence of personality traits and their risk tolerance. The financial advisers ‎can analyse this relation in terms of clients and then advise them accordingly.‎

    Social implications: All types of investors can gain insight into the relationship between ‎the personality traits of individuals and their risk tolerance levels. ‎

    Originality/value: The interrelation of Big Five taxonomy with the risk tolerance of retail ‎investors and the research gap has been identified

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    Khaitan, J. ., & Singh, D. D. . (2025). Big Five Personality Traits and Financial Risk Tolerance among ‎Retail Investors: A Systematic Literature Review. International Journal of Accounting and Economics Studies, 12(6), 161-168. https://doi.org/10.14419/bv72nr69