Riccardo Calcagno|Maela Giofré|Maria Cesira Urzì-Brancati
To trust is good, but to control is better: How investors discipline financial advisors’ activity
EMLYON Business School|Collegio Carlo Alberto|University of Turin|Collegio Carlo Alberto
using survey clients one largest italian banks find investors low level trust professional advisors seek financial counselling make decisions autonomously investigate whether investors exert form control recommendations receive one investors push advisors provide better recommendations either asking second experts opinion case credence services monitoring closely advisors activity find three quarters investors exert control advisors different types financial competence selfassessed testbased serve different purposes investors featuring higher selfassessed financial competence likely control advisors activity mechanism investors exert control advisors activity depends instead investors degree testbased financial literacy investors high financial literacy directly monitor advisors activity investors low financial literacy likely seek second professional opinion support recommendations previously received findings suggest improving investors financial knowledge may foster direct control advisors activity moreover facilitating comparison financial products standardized centralized information may effective protect poorly literate investors