Can investment advisors promote rational investment? Evidence from micro-data in China




Xiaomeng Lu, Yong Zhang, Yixing Zhang, Lin Wang


Investment advisors are important participants in financial markets. With the increasing demand for household financial asset management in China, the role of investment advisors is being widely discussed. Taking investors’ degree of diversification as the proxy of the rational investment, this study examines the role of investment advisors in promoting rational investments. It finds that investors with investment advisors are more likely to invest rationally. Further analysis shows that investment advisors play a greater role in promoting rational investment of investors with more investment experience, better financial literacy, more investible assets and male. The conclusions of this study indicate that giving full play to the role of professional investment advisors in household asset allocations and encouraging investors to invest rationally is important for the prevention of financial risks and the promotion of the healthy development of the financial market.

Supported by the 111 Project B16040