The Financial Services Authority of Indonesia (OJK) survey in 2016 has shown the financial literacy index in Indonesia was only about 21.8%. A lot of illegal investment in Indonesian society in recent years proves that the Indonesian people have not fully understood the benefits and risks of financial decision making. The research describes demographic factor and risk tolerance in the context of Indonesia’s society. The questionnaires distributed online and were obtained 850 respondents. To analyze the role of demographic factors on the willingness to take risks, we use Subjective Risk Tolerance, which is describing the respondent’s perception of risk. The result indicates that gender and age statistically insignificant in describing risk tolerance. Meanwhile, marital status, income, and education significantly important in determining risk tolerance. Gender equality in the working environment means women and men have an equal chance to get job and position in a company. This chance also means that women have a great chance to get more income and wealth than before. Marital status related to responsibility, the greater the responsibility assumes the smaller the level of risk tolerance. The better the knowledge, the better the understanding of the financial decision. Information processed and used to make a better decision. The result shows that in order to conduct an education program and increasing society’s knowledge, Government of the Republic of Indonesia, especially to The Indonesia Stock Exchange and Securities Firm should make attention to demographic factor and fit the investment product with investor’s profile.
The increase in the investment complications in the current environment has increase the need of the good quality financial advices services. Based on this, the aim of the study is being to investigate the join effect of risk tolerance (RT) and risk perception (RP) on the individual risky asset allocation decision along with the other essential variable in the context of financial advice which is consist of financial literacy and trust. For this purpose, data was collected from the 210 financial advisors of the banking sectors by using a convenient sampling technique which yield a 70% response rate. For analysis, Structural Equation Modeling (SEM) technique was employed. The SEM analysis has shown that trust has positive and significant association with the RP and FL, and FL also has a positive and significant association with the risk tolerance and while insignificant with the RP. In addition, RP and RT also have a positive and significant association with the asset allocation in the banking sector of Indonesia. Based on the findings, current study added a body of literature in the empirical findings which could become a new of area of research in future. The research limitations and future directions are also discussed at the end of the study.