Inga-Lill Söderberg

Relationships Between Advisor Characteristics and Consumer Perceptions

Purpose – This paper aims to investigate the relationships between advisor characteristics and consumer risk perception, willingness to follow advice and perception of advisor credibility in a financial services context. It answers calls for more knowledge about financial advisors’ influence on financial decision‐making among consumers.Design/methodology/approach – An experimental study, displaying financial advice together with photographs of advisors, was completed by convenience sampling of 200 Swedish consumers and analysis using statistical techniques to compare groups: two‐way between‐groups ANOVA.Findings – This study shows that advisor gender affected consumer risk perceptions, willingness to follow advice and perception of advisor credibility in a financial services context, whereas advisor mood affected only consumer willingness to follow advice. No biases depending on buyer–seller similarity were found.Research limitations/implications – The study focuses on consumer perceptions – not real‐life...

The relationship between consumer characteristics and mortgage preferences: A case study from Sweden

Purpose– The purpose of this paper is to investigate consumer characteristics that influence Swedish consumers’ mortgage rate decisions, such as the choice between an adjustable rate mortgage (ARM) ...

The dark side of trust and the light side of working alliances in financial services

Purpose – The purpose of this paper is to use psychological theory to improve our understanding of financial advice-taking. The paper studies how a working alliance between financial service customers and advisors affects the advisors assessment of the financial service buyers perceived risk preferences, and what role trust plays as a mediating variable. Design/methodology/approach – The paper obtained data by means of a questionnaire that was answered by 375 matched pairs of bank advisors and customers. Findings – This paper explains how the working alliance method – a concept from psychotherapeutic theory – between financial service customers and advisors affects the advisors understanding of the financial service buyers perceived risk preferences. The paper also finds that the role of trust is perceived differently by the advisor and the customer. Advisors see that as their clients learn to trust them they lose touch with the customers perceived risk preferences, whereas customers do not perceive ...

Investigating explanatory theories on laypeople’s risk perception of personal economic collapse in a bank crisis – the Cyprus case

We investigate the explanatory power of decision, psychometric, and trust theory to describe laypeople’s risk perception of personal economic collapse in a bank crisis. The aim of this investigation is to improve the understanding of the effects of national initiatives for crisis fighting taken to prevent systemic risk. Using a stratified sample of 738 Cypriote citizens, we conducted an investigation in Cyprus in the spring of 2013 when the country was facing a bank crisis. At that point in time, the Cypriote Government had imposed capital controls to prevent a bank run. We find that decision theory variables alone have low explanatory value on laypeople’s risk perception, and that laypeople’s risk perception in this situation is affected primarily by psychometric variables. Further, confidence in one’s own bank also explains risk perception. Our findings contribute novel knowledge about risk perceptions in a financial crisis, with practical crisis management implications for regulators.

An investigation of the impact of financial literacy, risk attitude, and saving motives on the attenuation of mutual fund investors’ disposition bias

Purpose - The purpose of this paper is to investigate the impact of financial literacy, risk attitude, and saving motives on the attenuation of mutual fund investors’ disposition bias. Specifically, the authors focus on individual characteristics explaining the investors’ propensity to sell shares in a poorly performing mutual fund. Design/methodology/approach - The study relies on survey data collected from 1,564 Swedish households in 2013. The authors test the hypotheses considering three different portfolio compositions and portfolio performances. Each composition corresponds to a dependent variable and a separate model which are estimated using ordinal logistic regression. Findings - The authors find that different forms of financial literacy affect attenuation of the disposition effect. Specifically, the authors find that knowledge about mutual funds and knowledge about current market conditions affect the attenuation of the disposition effect, whereas the authors find no support for the effect of “technical financial knowledge” (e.g. the ability to calculate compound interest rates). The authors also find no support for the effects of risk attitude and saving motives on the attenuation of the disposition bias. Originality/value - The findings suggest a need for a more fine-grained conceptualization of the financial literacy concept and its effect on investors’ disposition bias. Since an important implication of the findings is that financial literacy could potentially help people overcome behavioral bias, the study provides insights for policymakers as well as into the discussion on the design of consumer education programs.

Borrower characteristics and mortgage rate choice in Sweden

Purpose– The purpose of this paper is to investigate driving forces behind mortgage rate choice among homeowners in a market of no mortgage rate spread. The study reported on was conducted in Swede ...