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School of Business | Department of Finance | Finance | 2012
Thesis number: 12727
Do investment advisors’ personal perceptions affect customers’ investments?
Author: Paulanto, Visa
Title: Do investment advisors’ personal perceptions affect customers’ investments?
Year: 2012  Language: eng
Department: Department of Finance
Academic subject: Finance
Index terms: rahoitus; financing; sijoitukset; investments; neuvonta; counselling; riski; risk; portfolio; portfolio
Pages: 82
Key terms: investment advisor, risk preference, portfolio allocation, risk determinant, stock market participation

The study has two main objectives. Firstly, I assess whether investment advisor?s personal characteristics or perceptions affect their customers? willingness to take risks by controlling traditional risk determinants such as age, gender, education, investment experience, wealth, and income. Secondly, I study whether these same characteristics or perceptions affect customers? personal investments and stock market participation.


The data is gathered from a large Finnish commercial bank?s customers and their investment advisors. Customer?s data is based on bank?s Investment Advisory Tool (IAT) which was collected in financial advisor?s client meetings between February 2007 and March 2011. IAT-questionnaire aims to determine private investors? attitudes toward risk and suggest investment opportunities accordingly. Investment advisors? data is based on a modified risk attitude questionnaire, which was collected in April 2011. The data is gathered from customers and advisors who belong to one of the group?s six largest banks. In total, the whole data includes 26,997 private Finnish investors? risk profiles and 105 investment advisor risk profiles. All data is masked in a way that no investor or advisor can be identified from the dataset.


Findings of the study indicate that advisor characteristics and perceptions seem to have an effect on their customers? risk attitudes. I find that advisor?s risk attitude, male gender, education and experience have positive effect on customers? willingness to take risks. Instead, having carried out FASD examination or advisor?s personal interests to invest in stocks or other assets seem to decrease customers? risk taking. Moreover, it appears that advisor?s age, FASD qualification and male gender increase customers? stock market participation. However, advisors? personal risk taking doesn?t seem to affect their customers? investments.
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