How do retail investors make financial decisions?

19 October 2016

How do retail investors make financial decisions?

Professors Chris Brooks and Carola Hillenbrand have been awarded a £0.5m research grant by the Economic and Social Research Council (ESRC) to investigate the effects of cognitive and emotional bias on retail investment choices.

Professors Chris Brooks and Carola Hillenbrand have been awarded a £0.5m research grant by the Economic and Social Research Council (ESRC) to investigate the effects of cognitive and emotional bias on retail investment choices.

The project will look at how investors make decisions, the effects and consequences of cognitive and emotional biases in the investor's decision-making process, the impact of the way that IFAs present information to retail investors and the effect of clients' emotional state on the investments that they select.

Professor Brooks, Professor in Finance from the ICMA Centre at Henley Business School said:

"I am delighted that the ESRC have agreed to fund this research, which I hope will make a valuable contribution to our knowledge of how investors make financial decisions. Retail investors have been largely ignored in the existing academic literature, leaving policymakers lacking a firm knowledge-base, and this grant will enable us to provide evidence in this important field. The findings of the project will contribute to knowledge and potentially improve the financial advisory process for hundreds of thousands of members of the investing public."

 

See the full story on the ICMA Centre website.

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