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

Christopher Amaral; Ceren Kolsarici

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

Management

Research output: Contribution to journal › Article › peer-review

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 language	English
Journal	Journal of Retailing and Consumer Services
Volume	54
Publication status	Published - May 2020

Keywords

Financial advisors
Consumer heterogeneity
Latent class choice model

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title = "The financial advice puzzle: The role of consumer heterogeneity in the advisor choice",

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.",

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author = "Christopher Amaral and Ceren Kolsarici",

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AU - Kolsarici, Ceren

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AB - 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.

KW - Financial advisors

KW - Consumer heterogeneity

KW - Latent class choice model

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JO - Journal of Retailing and Consumer Services

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SN - 0969-6989

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