The Impact of Financial Advice Certification on Investment Choices

Abstract

The purpose of this study is to investigate whether a professional designation affects consumer choice behavior within the area of investment decision making. Forty-six participants were endowed with real money and received hypothetical investment advice from a certified financial planner (CFP) Professional and a stockbroker. Among low-income households, advice from a CFP altered investor choice behavior within hypothetical education and retirement savings accounts. When participants made investment decisions using education funds and received advice from a CFP, the mean expected value of their investment choices was $43,913, compared to $25,870 given advice from a stockbroker. When investment decisions were made using retirement funds, the average expected value given advice from a CFP and a stockbroker was $53,424 and $33,207, respectively. If an investor was risk-neutral or risk-seeking, investment choices were improved when advice was rendered by a CFP relative to a stockbroker.

Linking Financial Capability, Advice, Anxiety, Social Security, and Residential Status with Outward Remittances: Evidence from the UAE

“…Financial and economic researchers have emphasized financial guidance as a very effective replacement for financial knowledge, and they also claimed that it influences the decision to purchase financial goods and services (Calcagno & Monticone, 2015; Cwynar et al, 2020). Researchers have also suggested that receiving financial guidance from a qualified adviser can improve investment outcomes (Guillemette & Jurgenson, 2017). Some of the current literature on migrant behavior have also highlighted how migrants themselves recognize the need for effective financial advice (Natoli, 2015).…”

“…According to various writers in the field, financial advice could replace financial literacy because it influences a person's financial decisions concerning financial goods and services (Cwynar et al, 2020;Nguyen & Rozsa, 2019). Previous studies also found that whenever guidance from a qualified financial advisor is obtained, even risk-averse consumers change their investment behavior, increasing the value of the financial decision (Guillemette & Jurgenson, 2017). When offered the chance to attend any lesson on enhancing financial knowledge, researchers performed tests and concluded that most migrants are uninterested in financial advice and that it has no impact on their financial choices, thereby impacting their remittance behavior (Natoli, 2015(Natoli, , 2018.…”

Role of Social Networking Sites in Financial Product Choice: An Investigation Through the Theory of Planned Behavior

“…The researchers in the past have also argued upon online resources and experts being an extremely vital source of good and sound financial advice (Çera et al, 2020;van Rooij et al, 2011). The researchers have also argued that advice received from a certified financial expert has an important influence on risk perception and trust of investors causing them to invest more (Guillemette & Jurgenson, 2017). As a result, it appears that there exists a link between internet exposure and financial advice (Khan et al, 2020).…”

“…Anxiety arises from the worry of losing money as a result of a poor investment decision (Cwynar et al, 2020) that can be controlled by online expert advice (Cwynar et al, 2020). As we have already discussed that experts' opinion affects the trust level in investment decision and thereby has a positive impact on investments (Guillemette & Jurgenson, 2017), furthermore, the digital platform provides good and reliable assistance in the form of online resources and expert counsel ( van Rooij et al, 2011) and peers' opinion (Rambe & Jafeta, 2017).…”

“…Many researches on the impact of social media on consumer behavior have been undertaken in the past (Hasan et al, 2019) and have argued that the access to digital resources and experts' not only reduce stress but the availability of peer opinion also affects the product choice (Cwynar et al, 2020;Guillemette & Jurgenson, 2017;Rambe & Jafeta, 2017;van Rooij et al, 2011) though, the authors failed to find any conclusive research examining the influence of social media on financial investment through the application of the TPB (Ajzen, 1991) moderated by gender as a characteristic of the population under study in context of a developing nation hence the present study will be first of its' kind in examining the aforementioned relationships.…”