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Variations in investment advice provision: A study of financial advisors of millionaire investors

journal contribution
posted on 03.06.2021, 14:53 by Ylva Baekstrom, Ian Marsh, Joanne SilvesterJoanne Silvester
Vignette methodology is used to examine how the personal characteristics of investors and financial advisors contribute to portfolio recommendations, and the judgements that advisors make about investment knowledge and control of prospective millionaire UK clients. We find that advisors use investor characteristics to make recommendations broadly in line with economic theory and regulatory requirements. However, women are judged less knowledgeable and in control of their investments than equivalent men. They also receive portfolio recommendations with slightly lower risk profiles. Portfolio recommendations vary by advisor, with experienced advisors and those with wealthier clients recommending higher risk portfolios. Unmeasured advisor variables also impact on judgements and recommendations. These findings have relevance to the wealth management industry and regulators, in focusing attention on the conscious and unconscious influences on the judgements advisors make about their clients.

History

School

  • Business and Economics

Department

  • Business

Published in

Journal of Economic Behavior and Organization

Volume

188

Pages

716-735

Publisher

Elsevier

Version

AM (Accepted Manuscript)

Rights holder

© Elsevier

Publisher statement

This paper was accepted for publication in the journal Journal of Economic Behavior and Organization and the definitive published version is available at https://doi.org/10.1016/j.jebo.2021.05.008

Acceptance date

05/05/2021

Publication date

2021-06-22

Copyright date

2021

ISSN

0167-2681

Language

en

Depositor

Prof Jo Silvester. Deposit date: 2 June 2021