The moderating role of advisor Big Five personality on the association between financial advice and investor trading: Evidence from the Chinese futures market

Muhammad Zubair Tauni (), Fayaz Ali, Salman Yousaf (), Hamid Ali Shaikh and Zia-Ur-Rehman Rao
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Muhammad Zubair Tauni: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School, EM Normandie - École de Management de Normandie = EM Normandie Business School, Zhejiang Gonshang University, DUFES - Dongbei University of Finance and Economics, Dalian
Fayaz Ali: DUFES - Dongbei University of Finance and Economics, Dalian
Salman Yousaf: Fudan University [Shanghai], Wenzhou-Kean University
Hamid Ali Shaikh: DUFES - Dongbei University of Finance and Economics, Dalian
Zia-Ur-Rehman Rao: Forman Christian College

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Abstract: We examined how a psychological characteristic, namely advisor Big five personality moderate the influence of financial advice on investor futures trading. This research tested the hypotheses based on the unique data set collected from 408 investor-advisor dyads in Chinese futures market. Our results provide empirical evidence that the use of financial advice leads investors to trade more futures contracts when advisor personality tends to be openness, conscientiousness, and extraversion. On the other hand, financial advice negatively affects futures trading when the personality of advisors is likely to be neurotic. This research posits that retail investors trade differently if their advisors have a specific personality and therefore the investor trading patterns could be partly explained by exogenous supply-side factors. We suggest that the psychological characteristics of advisors can be relevant factors for policymakers in the financial services industry in order to improve their business.

Keywords: Financial Advice; Futures Trading; The Big Five personality; Chinese Futures Market (search for similar items in EconPapers)
Date: 2021-03-10
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Published in Psychologia, 2021, 62 (3-4), pp.289-311. ⟨10.2117/psysoc.2020-A004⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02983225

DOI: 10.2117/psysoc.2020-A004

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