Principles and Practice of Structural Equation Modeling (2nd ed.)

Self-attribution bias is a long-standing concept in psychology research and refers to individuals’ tendency to attribute successes to personal skills and failures to factors beyond their control. Recently, this bias is also being studied in household finance research and is considered to underlie and reinforce investor overconfidence. To date, however, the existence of self-attribution bias amongst individual investors is not directly empirically tested. That is, it remains unclear whether good (vs. bad) returns indeed make investors believe more (vs. less) strongly that skills drive their performance. Using a unique combination of survey data and matching trading records of a sample of clients from a large discount brokerage firm, we find that: (1) the higher the returns in a previous period are, the more investors agree with a statement claiming that their recent performance accurately reflects their investment skills (and vice versa); and (2) while individual returns relate to more agreement, market returns have no such effect.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2441231_code375352.pdf?abstractid=2367230&mirid=3

Self-Attribution Bias in Consumer Financial Decision-Making: How Investment Returns Affect Individuals' Belief in Skill

http://www.arvidhoffmann.nl/Hoffmann_Post_2014_JBEE.pdf

Self-attribution bias in consumer financial decision-making: How investment returns affect individuals' belief in skill

Purpose – This paper aims to investigate the relationships between advisor characteristics and consumer risk perception, willingness to follow advice and perception of advisor credibility in a financial services context. It answers calls for more knowledge about financial advisors’ influence on financial decision‐making among consumers.Design/methodology/approach – An experimental study, displaying financial advice together with photographs of advisors, was completed by convenience sampling of 200 Swedish consumers and analysis using statistical techniques to compare groups: two‐way between‐groups ANOVA.Findings – This study shows that advisor gender affected consumer risk perceptions, willingness to follow advice and perception of advisor credibility in a financial services context, whereas advisor mood affected only consumer willingness to follow advice. No biases depending on buyer–seller similarity were found.Research limitations/implications – The study focuses on consumer perceptions – not real‐life...

Relationships between advisor characteristics and consumer perceptions

Purpose




The purpose of this paper is to present a systematic overview of the current state of research on innovations in financial services and identifies the areas that have received less attention, and hence offer opportunities for future research.




Design/methodology/approach




An extensive search identified 121 research papers that have studied innovations in financial services from January 1990 to March 2015. A thorough content analysis objectively organized and coded the studies based on various aspects including publication year, focus of study, methodology, unit of analysis, sample, data analysis method, and geographical region. Analysis of the resulting data presents an overview of the research and identifies areas for future research.




Findings




The findings indicate that research on innovations in financial services is diverse and has explored various topics. The findings summarize the research papers with regards to each of the aforementioned aspects and offer researchers directions for future research.




Research limitations/implications




The sample size of 121 articles is an adequate sample size for the purpose of the study and it is in line with similar studies on innovations in other areas. However, future research can expand the study to include more academic journals in addition to reviewing and synthesizing the qualitative aspects of studies and meta-analysis of the identified relationships.




Originality/value




The study is the first to present a holistic overview of the current state of research on innovations in financial services. The findings offer clear directions to researchers for future research and hence can be used to promote research in these areas.

Research on financial services innovations: A quantitative review and future research directions

Purpose – The paper aims to identify which factors determine (German) retail banking customers' intention to adopt a new remuneration system for financial advice. The new system is a pay‐per‐use advisory model that supersedes existing commission‐based advisory approaches.Design/methodology/approach – The paper develops and tests a comprehensive conceptual framework that includes perceived innovation characteristics, relationship quality, and socio‐demographic and psychographic variables to explain adoption intentions of the new remuneration system. The data come from a survey among clients of a large German retail bank.Findings – Perceived innovation characteristics (i.e. relative advantage) largely determine the intention to adopt the fee‐based advisory model. Consumer and relationship quality variables do not directly impact adoption intentions, but have an indirect effect through influencing perceived innovation characteristics and moderating their relative importance. Relationship quality indicators, ...

/pdf/customer-intention-to-adopt-a-fee-based-advisory-model-an-36b8nx23rq.pdf

Heiner Franken

Papers

Customer intention to adopt a fee‐based advisory model: An empirical study in retail banking