The financial advice puzzle: The role of consumer heterogeneity in the advisor choice

Christopher Amaral, Ceren Kolsarici

Research output: Contribution to journalArticle

Abstract

We investigate motivational drivers of financial advisor use, accounting for investor heterogeneity, with the goal of helping institutions increase the use of financial advisor services. The results from a latent class choice model reveal two distinct segments that differ in their approach to the financial advice decision. While higher levels of risk tolerance, trust, and self-efficacy increase financial advice use for both segments, albeit at much higher propensities for Segment 1, personality only matters for Segment 1. Moreover, their regulatory focus differs with Segment 1 being promotion and Segment 2 being prevention focused. Using these results, we offer suggestions for marketing strategies.
Original languageEnglish
JournalJournal of Retailing and Consumer Services
Volume54
Publication statusPublished - May 2020

Keywords

  • Financial advisors
  • Consumer heterogeneity
  • Latent class choice model

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