Financial Advice and Stock Market Participation

52 Pages Posted: 18 Jul 2010 Last revised: 7 Jun 2014

See all articles by Dimitris Georgarakos

Dimitris Georgarakos

European Central Bank (ECB) - Directorate General Research; Center for Financial Studies (CFS)

Roman Inderst

Goethe University Frankfurt

Multiple version iconThere are 3 versions of this paper

Date Written: May 2014


We introduce professional financial advice in households’ choice to hold risky financial assets. Depending on their perceived own financial capability, it is either trust in financial advice or their perception of consumer protection that affects more households’ willingness to hold risky assets such as stocks. We present evidence consistent with these predictions. Our empirical analysis also highlights economically significant differences in households’ perception of their rights as consumers of financial services, even when they face similar legal conditions.

Keywords: Financial Advice, Trust, Consumer Protection, Household Finance

JEL Classification: E1, G2, D8

Suggested Citation

Georgarakos, Dimitris and Inderst, Roman, Financial Advice and Stock Market Participation (May 2014). Available at SSRN: or

Dimitris Georgarakos (Contact Author)

European Central Bank (ECB) - Directorate General Research ( email )

Sonnemannstrasse 20
Frankfurt am Main, 60314

Center for Financial Studies (CFS) ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323

Roman Inderst

Goethe University Frankfurt ( email )

Theodor-W.-Adorno-Platz 3
Frankfurt am Main, Hessen 60629
+49 (69) 798-34601 (Phone)
+49 (69) 798-35000 (Fax)


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