The Impact of Financial Advice Certification on Investment Choices
effects of financial education, financial status and behavior, financial advising, certified financial planners, fiduciary duties, consumer trust
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.
Guillemette, Michael A. and Jurgenson, Jesse B., "The Impact of Financial Advice Certification on Investment Choices" (2017). Financial Education Curriculum. 23.