The Influence of Financial Advisors on Household Portfolios: A Study on Private Investors Switching to Financial Advice

2009 ◽  
Author(s):  
Ralf Gerhardt ◽  
Andreas Hackethal
Keyword(s):  
Financial Advisors ◽  
Financial Advice ◽  
Household Portfolios ◽  
Private Investors

scholarly journals Regulating household financial advice

2012 ◽  
Vol 1 (3) ◽  
pp. 50-54 ◽  
Author(s):  
Benjamin Cummings ◽  
Michael Finke
Keyword(s):  
Economic Theory ◽  
Financial Advisors ◽  
Financial Advice ◽  
Investment Advice

This paper reviews economic theory related to investment advice. This theory explains 1) why financial advisors need to be carefully regulated for the benefit of both the investment advice industry and for consumers, 2) why principles-based regulation (e.g., a fiduciary standard) is more efficient than rules-based regulation, 3) why dual regulation of financial professionals providing investment or insurance advice is inefficient and inequitable policy, and 4) why the application of a universal and uniform fiduciary standard will be difficult to implement

scholarly journals Communicating Sustainable Responsible Investments as Financial Advisors: Engaging Private Investors with Strategic Communication

2021 ◽  
Vol 13 (6) ◽  
pp. 3161
Author(s):  
Nadine Strauß
Keyword(s):  
Financial Markets ◽  
Change Agents ◽  
Strategic Communication ◽  
Future Research ◽  
Financial Advisors ◽  
Responsible Investing ◽  
Private Investors ◽  
Communication Interventions ◽  
And Training

Although sustainable responsible investing (SRI) has increasingly become popular on the financial markets, the potential of raising capital from private investors for sustainable development has not been efficiently seized thus far. The lack of knowledge and training about SRI by financial advisors has often been identified as one of the main reasons for this investment gap. In order to accelerate the role of financial advisors as change agents for SRI, this study proposes several strategic communication interventions that advisors could employ in their advisory talks to raise more attention and engagement among private investors for SRI. The interventions proposed are oriented on the 5A model of SRI decision making by Herwig Pilaj and drawn from an interdisciplinary literature review on sustainability, communication, and attitudinal and behavioral change. The results provide a perspective and practical guide for financial advisors on how to effectively communicate SRI to private investors. Limitations and areas future research are discussed.

The Emergence of the Robo-Advisor

2019 ◽  
pp. 13-37 ◽  
Author(s):  
Jill E. Fisch ◽  
Marion Labouré ◽  
John A. Turner
Keyword(s):  
Human Services ◽  
Cost Savings ◽  
Financial Advisors ◽  
Computer Algorithms ◽  
Online Services ◽  
Financial Advice ◽  
Human Contact ◽  
Investment Portfolios

Robo-advisors are online services that use computer algorithms to provide financial advice and manage customers’ investment portfolios. This chapter describes the development of the robo-advisor industry and compares robo-advisors to traditional human financial advisors. Robo-advisors emerged in response to people’s need for financial advice and the high cost of obtaining that advice from human advisors. Pure robo-advisors, which offer no direct human contact, are generally substantially less expensive than human advisors, and the use of computer algorithms allows for an increasing degree of personalization of the advice. Nevertheless, robo-advisors do not provide customers with all of the services offered by human advisors and, in particular, human contact. In response, some firms are offering hybrid robo/human services that combine cost savings from a robo-advisor with some human input.

Financial Advisory Services

2017 ◽  
Author(s):  
Jeroen Nieboer ◽  
Paul Dolan ◽  
Ivo Vlaev
Keyword(s):  
Behavioral Science ◽  
Expert Advice ◽  
Financial Advisors ◽  
Financial Return ◽  
Financial Advice ◽  
Advisory Services ◽  
Behavioral Needs ◽  
Financial Interests ◽  
Service Offering

Evidence from the behavioral sciences, notably economics and psychology, has profoundly changed the way policymakers and practitioners present expert advice to consumers. This chapter examines the behavioral science evidence on financial advice and explores its implications for the financial advisory profession. It explains how consumers of retail financial advice respond to certain aspects of the advice in predictable ways, sometimes exhibiting behavioral biases or following certain conventions in their decision making. By recognizing and anticipating these responses, financial advisors can offer a more complete service, offering benefits beyond the strictly financial return. But the behavioral needs of consumers may also provide advisors with incentives that are not strictly aligned with their clients’ financial interests. Finally, the increasing role of technology will play an important role in shaping the financial advisory services of the future.

Part II Investment Firms and Investment Services, 6 Independent Financial Advice

2017 ◽  
Author(s):  
Giudici Paolo
Keyword(s):  
Financial Markets ◽  
Economic System ◽  
Portfolio Management ◽  
Financial Advisors ◽  
Financial Advice ◽  
Suitability Assessment ◽  
Governance Regime ◽  
Personal Recommendation ◽  
Investment Advice

The quickest policy indication for increasing households’ trust in financial markets, to the benefit of the economic system, seems to be the offer of professional financial advice on affordable terms. The problem is how to convince investors to pay for advice, and how to protect investors who do not want to pay for advice from conflicted advice and from hard sell under the guise of personal recommendation—an area where MiFID I has not performed well. MiFID II’s answer is to pose a new set of information duties on financial advisors with the clear intention of nudging investors towards independent, fee-only advice. The intention is good. However, the new regime raises many important issues, including the ambiguity of the ‘independent’ suit, the interaction between the product governance regime and the suitability assessment, the regulatory inconsistency that it is emerging between investment advice and portfolio management, and the potential costs of the written statement of suitability.

The impact of business tourism clustering on the regional economy's development: A Greater Moscow case study

2020 ◽  
Vol 18 (7) ◽  
pp. 1397-1414
Author(s):  
K.S. Golondarev
Keyword(s):  
Multivariate Analysis ◽  
The State ◽  
Investment Climate ◽  
Private Investors ◽  
The Impact

Subject. This article explores the issues of business tourism clustering in Greater Moscow. Objectives. The article intends to justify the need to create a business tourism cluster in Greater Moscow to improve the investment climate in the region. Methods. For the study, I used a multivariate analysis, forecasting, and extrapolation. Results. The article shows a certain relationship between the efficient functioning of the business tourism cluster and the economy's development. Conclusions and Relevance. Certain types of tourist clusters can serve as platforms for attracting investors and implementing marketing plans. The business tourism cluster is a link between buyers and sellers in various industries. The results of the study can be used to improve the effectiveness of the cluster initiative in business tourism, as well as find ways of cooperation between the State and private investors when creating the business tourism cluster in Greater Moscow.

Model-Based and Model-Free Social Cognition

2019 ◽  
Author(s):  
Leor M Hackel ◽  
Jeffrey Jordan Berg ◽  
Björn Lindström ◽  
David Amodio
Keyword(s):  
Reinforcement Learning ◽  
Social Cognition ◽  
Learning Strategies ◽  
Memory Systems ◽  
Learning Task ◽  
Financial Advisors ◽  
Model Based ◽  
Model Free ◽  
Systems Model ◽  
Task Assessment

Do habits play a role in our social impressions? To investigate the contribution of habits to the formation of social attitudes, we examined the roles of model-free and model-based reinforcement learning in social interactions—computations linked in past work to habit and planning, respectively. Participants in this study learned about novel individuals in a sequential reinforcement learning paradigm, choosing financial advisors who led them to high- or low-paying stocks. Results indicated that participants relied on both model-based and model-free learning, such that each independently predicted choice during the learning task and self-reported liking in a post-task assessment. Specifically, participants liked advisors who could provide large future rewards as well as advisors who had provided them with large rewards in the past. Moreover, participants varied in their use of model-based and model-free learning strategies, and this individual difference influenced the way in which learning related to self-reported attitudes: among participants who relied more on model-free learning, model-free social learning related more to post-task attitudes. We discuss implications for attitudes, trait impressions, and social behavior, as well as the role of habits in a memory systems model of social cognition.

High Quality Financial Advice Wanted!

2007 ◽  
Author(s):  
Ralph Bluethgen ◽  
Steffen Meyer ◽  
Andreas Hackethal
Keyword(s):  
High Quality ◽  
Financial Advice
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