INVESTIGATING MEDIA AND COMMUNICATION CHANNEL SEARCH BEHAVIOUR OF RETAIL INVESTORS FOR INVESTMENT DECISION IN EMERGING FINANCIAL MARKETS

The purpose of this study aims at investigating the major sources of information which drives the investor’s behaviour in investment decisions in Indian Financial Markets. Diverse sources are classified into three categories, that is, financial advice, word-of-mouth communication and specialised press to investigate their effects on the investment behaviour of investors. A total of 258 investors filled a survey on a questionnaire in the National Capital Region of India by using the purposive sampling method. For analysis of data, PLS-SEM was applied on the software version 3.2.9. The key outcome of the study revealed that financial advice was considered as first choice (β = 0.265, p<0.000) to build their investment decision primarily on weekly basis followed by word-of-mouth communication (β = 0.154, p<0.05). Lastly, the mutual fund investors prefer financial newspapers and financial reports published by mutual fund regulatory body and their companies in India to do mutual funds investment. This study proposed a conceptual model in the literature of information search behaviour for mutual funds and contributes significantly to the mutual fund companies and investment agencies to market financial products in an effective manner for investors.

FINANCIAL ADVICE, LITERACY, INCLUSION AND RISK TOLERANCE: THE MODERATING EFFECT OF UNCERTAINTY AVOIDANCE

The aim of this paper is to investigate the determinants of financial advice with a special focus on the cultural role in the influence of risk tolerance on seeking advice for financial issues. Financial literacy is covered by financial attitude, behaviour and knowledge. Financial inclusion is the other factor considered in the conceptual framework, as an indicator which can enhance both financial behaviour and financial advice. The research is based on primary data collected in two European nations, manifesting differences in culture, which gives the possibility to test the uncertainty avoidance role in the above relationship. This particular focus is the novelty of this work, as it sheds light on the importance of culture while designing policies with the aim to enhance individuals’ financial literacy and advice. The hypotheses are tested by using Partial Least Square- Structural Equation Modelling (PLS-SEM) method. It was found that financial behaviour improves as financial inclusion gets better, along with financial attitude and knowledge. Furthermore, financial advice is positively influenced by financial inclusion and risk tolerance and partly by financial literacy. Additionally, findings demonstrate that culture does matter in explaining differences between countries. Culture in this paper is represented by uncertainty avoidance, as one of the Hofstede’s culture dimension. Individuals from countries that manifest a very high preference for avoiding uncertainty reflect a negative relationship between risk tolerance and financial advice. The paper offers useful insights for policymakers and industry leaders in understanding the most influential factors on financial advice. This enables them to scheme policies and services aimed at equipping citizens with knowledge and skills to make the best use of their financial resources.

Overconfidence, Financial Advice Seeking and Household Portfolio Under-Diversification

This paper examines the relationship between overconfidence and losses from under-diversification among Dutch investors. We find that a lack of proper portfolio diversification is positively associated with overconfidence. Part of this relationship is mediated through the lower propensity of overconfident individuals to hire a professional financial adviser. We use data from the 2005 wave of the DNB Dutch Household Survey that provides us with detailed portfolio data of 257 investors. We proxy for overconfidence by exploiting the difference between measured and self-assessed financial literacy, and use this proxy in a regression model (with and without mediation) to explain the difference between the actual households return and the return that could have been obtained by selecting a portfolio on the efficient frontier with equivalent risk. Our results contribute to the current discussion among policy makers on the role of financial advice and self-perceptions in household financial decision-making.

Digital Engagement as a Predictor of Financial Capability, Financial Advice, and Financial Satisfaction

This paper investigates direct and indirect impacts of an individual’s digital engagement on their financial satisfaction considering a significant role of an individual’s financial capability and financial advice. The study is administered on the individual level, surveyed the working youth in northern India. PLS-SEM were employed using SMART-PLS version 3 for a confirmatory analysis and structural model assessment. Digital engagement has been established as a vital factor substantially influencing the individual’s financial advice, financial capability and financial satisfaction both directly and indirectly. The outcome of the study strongly favours the role and importance of digital engagement in the individual’s financial satisfaction. What is more, this paper contributes to the current knowledge by clarifying digital engagement as a possible predictor of financial capability, financial advice and financial satisfaction in the context of a low-income, developing country and applies it as a variable with the selected financial constructs. The originality and novelty of the study may be found useful to design effective policies.