Does The Indian Investor Seek Financial Advice? A Logistic Regression Analysis

Abstract

The functioning of the stock market is based on the availability of information. Many retail investors use a prescriptive form of decision-making (Hammond et al., 1998). Investment intermediaries are one of the influencing sources of information for a stock market investor. Thus, there is growing importance to the advisory function of various investment intermediaries Basing the help-seeking model of Joo & Grable (1999,2001), the present study develops a demographic and socio-economic profile of those investors who seek investment advice in India. Using the snowball sampling technique, data is collected from financial advice-seeking and non-seeking retail investors. Logistic regression analysis indicates that aged investors with more savings, large portfolio sizes, and high expected returns are the major seekers of financial advice. This study addresses the major institutional barrier financial advisory services face, i.e., consumer profiling and targeting (Westermann et al, 2020). It highlights the importance of delivering tailored financial advisory services.