Jason West
Financial advisor participation rates and low net worth investors
Griffith University
study presents simple analytical framework identify key determinants underlying incentives households engage financial advisors using us 2007 survey consumer finances employ logistic regression approach understand characteristics households engage financial advisors investment comprehensive financial advice find age education employment category income net worth highly significant variables related propensity engage financial advisor results also indicate significantly reduced active engagement advisors low net worth investors claimed low net worth investors survey construct model derive expected fee profile financial advisors function wealth compare fee structure financial advisor client portfolio find combination lower aggregate costs per investor higher expected fee income motivates advisors target higher net worth investors advisors therefore prefer higher net worth investors due lower aggregate costs engagement drives low investment participation rates less wealthy households