The financial advice puzzle: The role of consumer heterogeneity in the advisor choice
Christopher Amaral and
Journal of Retailing and Consumer Services, 2020, vol. 54, issue C
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.
Keywords: Financial advisors; Consumer heterogeneity; Latent class choice model (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:54:y:2020:i:c:s0969698919305326
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