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Financial advice seeking and behavioral bias

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  • Hsu, Yuan-Lin

Abstract

This study explicates the role of behavioral bias in financial advice seeking. Investors with behavioral biases are prone to making poor financial decisions, which advisors may help to eradicate. Drawing on an online survey of experienced individual investors, this study examines how behavioral bias affects financial advice seeking. The three biases identified in this study influence advice seeking differently: overconfident investors tend to invest by themselves, while investors with selfprotection bias and/or mental accounting bias are more likely to seek financial advice. The pedagogical implication is to address these biases to the public in financial literacy initiatives.

Suggested Citation

  • Hsu, Yuan-Lin, 2022. "Financial advice seeking and behavioral bias," Finance Research Letters, Elsevier, vol. 46(PB).
    • Handle: RePEc:eee:finlet:v:46:y:2022:i:pb:s1544612321004803
    DOI: 10.1016/j.frl.2021.102505
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    References listed on IDEAS

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    Cited by:

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    2. Mazzoli, Camilla & Ferretti, Riccardo & Filotto, Umberto, 2024. "Financial literacy and financial advice seeking: Does product specificity matter?," The Quarterly Review of Economics and Finance, Elsevier, vol. 95(C), pages 98-110.
    3. Cascavilla, Alessandro, 2023. "Between money and speculative asset: the role of financial literacy on the perception towards Bitcoin in Italy," MPRA Paper 118472, University Library of Munich, Germany.
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    6. Silva, Emmanuel Marques & Moreira, Rafael de Lacerda & Bortolon, Patricia Maria, 2023. "Mental Accounting and decision making: a systematic literature review," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).

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