Determinants of Household Broker Choice and the Impact on Performance

36 Pages Posted: 21 Aug 2015 Last revised: 28 Jul 2016

See all articles by Henry Leung

Henry Leung

University of Sydney Business School; Financial Research Network (FIRN)

Juliane Krug

Darmstadt University of Technology

P. Joakim Westerholm

University of Sydney Business School; Financial Research Network (FIRN)

Dirk Schiereck

Darmstadt University of Technology

Kingsley Y. L. Fong

University of New South Wales - School of Banking and Finance; Financial Research Network (FIRN)

Date Written: December 11, 2015

Abstract

To reconcile why a growing number of households prefer to make their own trading decisions rather than to obtain professional advice, we examine the influence of households’ demographic characteristics such as gender, age, income and education on the choice between full service and discount brokers. We find that in general education has a greater impact on broker choice for women than for men. For men trading on their own through discount retail brokers, higher income and education is associated with better risk adjusted performance. Furthermore it is found that men and women, regardless of the broker type they use, perform better with age. The improvement in performance with age is more pronounced for women than for men.

Keywords: broker choice, demographics, household investor

JEL Classification: G12, G14

Suggested Citation

Leung, Henry and Krug, Juliane and Westerholm, P. Joakim and Schiereck, Dirk and Fong, Kingsley Y. L., Determinants of Household Broker Choice and the Impact on Performance (December 11, 2015). 28th Australasian Finance and Banking Conference. Available at SSRN: https://ssrn.com/abstract=2648301 or http://dx.doi.org/10.2139/ssrn.2648301

Henry Leung (Contact Author)

University of Sydney Business School ( email )

402, H69
The University of Sydney
Sydney, NSW 2006
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Juliane Krug

Darmstadt University of Technology ( email )

Universitaets- und Landesbibliothek Darmstadt
Magdalenenstrasse 8
Darmstadt, Hesse D-64289
Germany

P. Joakim Westerholm

University of Sydney Business School ( email )

Cnr. of Codrington and Rose Streets
Sydney, NSW 2006
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Dirk Schiereck

Darmstadt University of Technology ( email )

Universitaets- und Landesbibliothek Darmstadt
Magdalenenstrasse 8
Darmstadt, Hesse D-64289
Germany

Kingsley Y. L. Fong

University of New South Wales - School of Banking and Finance ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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