Problem: This study aims to examine the factors that influence the individual's different choice of risk level. Demographic characteristics are the underlying factors being analyzed in the study with a special emphasis on geographic factors – this in order to analyze and explain the Swedish individual’s approach to risk. Based on certified private advisers’ perspective, the study will also examine their approach to manage individuals’ risk.

Purpose: Studying the differences in risk aversion among individuals when making investment decisions, based on demographic factors and geographical areas.

Theory: The essay’s theoretical framework deals with theories covering behavioral finance, the risk appetite development in individuals at a demographic and geographic way, and an overview of previous research on the subject.

Method: We conducted a quantitative study in which 340 respondents were asked to answer a survey. We also interviewed three certified counselors from three different banks in Sweden.

Conclusions: In line with behavioral finance theory, people are not rational when making investment decisions. The study concludes that people in big cities tend to be more risk-averse than people in smaller cities. Sex is shown to be a differentiating factor with men having a higher risk-aversion than women. A higher income and level of education leads to a higher risk attitude and marital status affects the risk appetite where a married person has a higher risk appetite than a person who is single. Age and education, showed to have no relationship to the level of risk.