The impact of biases, personality and financial advice on investment decisions
Levesley, René (2023) The impact of biases, personality and financial advice on investment decisions. PhD thesis, Birkbeck, University of London.
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Abstract
A unique data set, including both qualitative and quantitative data, from a large UK investment platform was used to assess how investment decisions are made and the impact financial advice has on these. Returns achieved by self-directed investors, and investors who had a financial adviser, were compared. The highest returns were achieved by investors who had a financial adviser. Financial advice reduces the number of trades placed, the amount of time spent obtaining information, as well as eliminating or reducing the impact of biases. A number of biases were observed, however, many of these did not actually lead to poor outcomes. Overconfident investors spent more time obtaining information and placed more trades, but this did not lead to lower returns. Overconfidence also had a significant impact on financial advice, differentiating whether investors seek advice and how it is consumed. Overconfident investors see a financial adviser as a consultant who they discuss investment ideas with and then make their own investment decisions, taking the credit for any excess returns achieved. Financial advice also moderates overconfident behaviours by reducing the number of trades placed and the amount of time spent obtaining information. Personality was found to have a limited impact on investment decisions.
Metadata
| Item Type: | Thesis |
|---|---|
| Copyright Holders: | The copyright of this thesis rests with the author, who asserts his/her right to be known as such according to the Copyright Designs and Patents Act 1988. No dealing with the thesis contrary to the copyright or moral rights of the author is permitted. |
| Depositing User: | Acquisitions And Metadata |
| Date Deposited: | 29 Jan 2024 14:53 |
| Last Modified: | 30 Jan 2024 03:25 |
| URI: | https://eprints.bbk.ac.uk/id/eprint/52940 |
| DOI: | https://doi.org/10.18743/PUB.00052940 |
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