Three essays on the influence of financial advice on household investment behavior

Date

2014-05

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Abstract

This dissertation looks at the influence of financial advice on households’ investment decisions. Considerable differences separate the investment behavior witnessed by empirical studies from normative suggestions for investing. Whether financial advice helps households make more optimal choices is of considerable interest. We find evidence that professional investment advice is linked to better financial decision making from households when the interest of the advisor and households are aligned. When interests are not strongly aligned professional financial advice does not appear to steer households toward the optimal behaviors suggested by normative models.

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Keywords

Financial advice, Annuitization, Longevity risk, Mortgage refinancing, Diversification, Household finance

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