Financial Advice and Investor Beliefs: Experimental Evidence on Active vs. Passive Strategies
Households in the U.S. and other developed countries frequently face complex financial decisions, such as managing retirement savings or health insurance. To help navigate these challenges, a growing range of financial advice options has emerged. These include traditional face-to-face guidance from advisors, automated robo-advice, and an expanding selection of online educational resources and videos. While […]
Antoinette Schoar is the Stewart C. Myers-Horn Family Professor of Finance at MIT Sloan School of Management, and Yang Sun is an Assistant Professor of Finance at Brandeis International Business School. This post is based on their recent paper.
Households in the U.S. and other developed countries frequently face complex financial decisions, such as managing retirement savings or health insurance. To help navigate these challenges, a growing range of financial advice options has emerged. These include traditional face-to-face guidance from advisors, automated robo-advice, and an expanding selection of online educational resources and videos. While extensive research has focused on the supply side of financial advice, particularly issues like conflicts of interest, much less is known about how individuals receive or respond to advice.
In the study “Financial Advice and Investor Beliefs: Experimental Evidence on Active vs. Passive Strategies,” we conduct a randomized controlled trial (RCT) to investigate how investors assess advice that either aligns with or goes against their priors, and the extent to which financial advice can shape their beliefs about investment strategies and their portfolio decisions.
