The Impact of Broker Geography on Retail Investor Behavior

37 Pages Posted: 28 Dec 2021

See all articles by Daniel Bradley

Daniel Bradley

University of South Florida

William Christopher Gerken

University of Kentucky - Finance

Jared Williams

University of South Florida

Date Written: December 27, 2021

Abstract

We examine the effects of broker geography, i.e., the location of a brokerage’s financial advisor workforce, on the geography of retail trading in the stocks that the broker’s analysts cover. We find that retail investors are significantly more likely to trade and own stocks that are covered by brokers who employ financial advisors that work in the investors’ metropolitan area. Buying and selling volume are both elevated regardless of whether the broker’s analysts are issuing optimistic or pessimistic research, suggesting that our findings are driven by the effects of equity research on investor awareness rather than investor credulity.

Keywords: Broker geography, financial advisors, analyst recommendations, retail investor behavior

JEL Classification: G24, G50

Suggested Citation

Bradley, Daniel and Gerken, William Christopher and Williams, Jared, The Impact of Broker Geography on Retail Investor Behavior (December 27, 2021). Available at SSRN: https://ssrn.com/abstract=3994790 or http://dx.doi.org/10.2139/ssrn.3994790

Daniel Bradley

University of South Florida ( email )

Tampa, FL 33620
United States

William Christopher Gerken

University of Kentucky - Finance ( email )

College of Business & Economics
Lexington, KY 40506-0034
United States

HOME PAGE: http://www.willgerken.com

Jared Williams (Contact Author)

University of South Florida ( email )

Tampa, FL 33620
United States

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