Location Decisions of Domestic and Foreign-Affiliated Financial Advisors: Australian Evidence

Abstract

This paper analyses the determinants of the start-up location choices for 54,064 Australian personal financial advisors, and examines these choices with respect to their foreign and institutional affiliations.The evidence presented suggests that advisors consider general socio-economic and financial demographics when first choosing the location to commence their careers. Advisors tend to locate in areas with high population, low unemployment, smaller households and more elderly persons. Competition does not deter planners from choosing a particular location. Furthermore, foreign originated start-ups ignore financial characteristics, and prefer to locate in regions in which general demographics indicate a large market size. Bank affiliated start-ups locate in more favorable locations than independent advisors, reflecting cost and informational advantages. Independent advisors demonstrate 'learning' by replicating the location choices of institutionally linked advisors in the short term.