Trust and Financial Advice

Jeremy Burke and Angela Hung

No WR-1075, Working Papers from RAND Corporation

Abstract: Trust plays an important role in financial decision-making, particularly regarding financial advice. In fact, investors cite "trust" as the most important determinant in seeking a financial service professional for advice (Hung et al., 2010). In this paper, we explore the relationships between financial trust and behaviors, attitudes, knowledge and preferences related to utilizing professional financial advice. Using survey and experiment data from the RAND-USC American Life Panel, we find that financial trust is correlated with advice usage and likelihood of seeking advisory services. Analysis of the experiment shows that trust is an important predictor of who chooses to receive advice, even after controlling for demographic characteristics and financial literacy. However, providing unsolicited advice has little impact on behavior, even for individuals with high levels of trust.

Pages: 44
Date: 2015-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.rand.org/content/dam/rand/pubs/working ... 1075/RAND_WR1075.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ran:wpaper:wr-1075

Access Statistics for this paper

More papers in Working Papers from RAND Corporation Contact information at EDIRC.
Bibliographic data for series maintained by Benson Wong ().