Is Unbiased Financial Advice to Retail Investors Sufficient? Answers from a Large Field Study
Open accessAbstract
Working with one of the largest brokerages in Germany, we record what happens when unbiased investment advice is offered to a random set of roughly 8,000 of the brokerage’s several hundred thousand active retail customers. We find that investors who most need the financial advice are least likely to obtain it. The investors who do obtain the advice (about 5%), however, hardly follow the advice, and so do not improve their portfolio efficiency much. Overall, our results imply that the mere availability of unbiased financial advice is a necessary but not sufficient condition for benefiting retail investors.
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Bhattacharya et al. (2012) find that customers of a German online broker who opted to obtain financial advice in a field study were among the most financially literate clients.
“Bhattacharya et al. (2012) find that those customers of a German online broker who opted to obtain financial advice in a field study were among the most financially literate clients”
From Financial literacy, financial advice, and financial behavior (2017) · cites this paper as Bhattacharya et al. (2012)
Cites
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Financial literacy, financial advice, and financial behavior
Stolper, O. A., & Walter, A. (2017) · Journal of Business Economics · doi:10.1007/s11573-017-0853-9 · Cited by 471 · see citing works
- Authors
- Bhattacharya, U., Hackethal, A., Kaesler, S., Loos, B., & Meyer, S.
- Venue
- Review of Financial Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 2012-01-12
- Volume
- 25
- Issue
- 4
- Pages
- 975-1032
- ISSN
- 0893-9454 (ISSN-L)
- 1465-7368
- OpenAlex
- W3124510896
- Cited by
- 383
- References
- 9
- Citations by year
- 2026: 20 · 2025: 18 · 2024: 51 · 2023: 27 · 2022: 18 · 2021: 33 · 2020: 26 · 2019: 24 · 2018: 17 · 2017: 16 · 2016: 24 · 2015: 28 · 2014: 27 · 2013: 19 · 2012: 26
- FWCI
- 53.15
- Type
- journal article
- Language
- en
- Open access
- green
- doi.org
- Locations
- Review of Financial Studies (publishedVersion)
- SSRN Electronic Journal (acceptedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- mediaTUM – the media and publications repository of the Technical University Munich (Technical University Munich) (submittedVersion)
- Rare & Special e-Zone (The Hong Kong University of Science and Technology) (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
- Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy, Pension, Retirement Analysis
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Keywords
- retail investors, investment advice, portfolio efficiency, brokerage, behavioral finance
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