The Impact of Financial Advice on Trade Performance and Behavioral Biases
Journal
Review of Finance
ISSN
1572-3097
ISSN-Digital
1875-824X
Type
journal article
Date Issued
2017-03
Author(s)
Abstract
We use a dataset from a large retail bank to examine the impact of financial advice on investors’ stock trading performance and behavioral biases. Our data allow us to classify each individual trade as either advised or independent and to compare them in a trade-bytrade within-person analysis. Thus, our study is not plagued by the endogeneity problems typically faced by studies on financial advice. We document that advisors hurt trading performance. However, they help to reduce some of the behavioral biases retail Investors are subject to, but this does not overcompensate the negative performance effects of the bad stock recommendations.
Language
English
Keywords
financial advice
individual investors
trade performance
behavioral biases
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Oxford University Press
Volume
21
Number
2
Start page
871
End page
910
Division(s)
Contact Email Address
nic.schaub@unisg.ch
Eprints ID
248453
File(s)![Thumbnail Image]()
Loading...
open.access
Name
The Impact of Financial Advice on Trade Performance and Behavioral Biases.pdf
Size
758.93 KB
Format
Adobe PDF
Checksum (MD5)
bd9da0a5647f5f9332e1cf446ca76128