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Article
Publication date: 18 December 2020

Tom Loonen

The Markets in Financial Instruments Directive (MiFID) II directive was enforced in the EU in January 2018. While EU-member states implemented this directive in their national…

Abstract

Purpose

The Markets in Financial Instruments Directive (MiFID) II directive was enforced in the EU in January 2018. While EU-member states implemented this directive in their national legislation, investment firms are still enforcing compliance. With the purpose of “investor protection”, the purpose of this study is to investigate the effectiveness of transparency, suitability, warning and information requirements. How do investment advisers view and embrace these MiFID II requirements? Are differences evident within this group of professionals?

Design/methodology/approach

In total, 267 Dutch investment advisors serving non-professional investors daily completed structured surveys on their opinion of the acceptance and effectiveness of the MiFID II requirements. The findings are compared with existing literature to examine similarities with other legislation.

Findings

The results demonstrated differences depending on the investment firms’ size and investment advisors’ seniority and gender. Professionals should be critical of new legislation and regulations, as it limits their autonomy. However, female investment advisors and those with up to ten years’ experience are less critical of the effectiveness of the MiFID II requirements, embracing them without discussion. Investment advisors in large investment firms believe that MiFID II contributes to investors’ interests, whereas those in small and medium-sized investment firms often do not share this opinion. For example, respondents considered cost transparency an effective requirement to achieve better investment services and protect investors’ interests.

Originality/value

The effectiveness and applicability of legislation are often viewed from a legal perspective, and enforcement is essential. However, this study explores legislation from the perspective of professionals under supervision.

Details

Journal of Financial Regulation and Compliance, vol. 29 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

Book part
Publication date: 17 June 2019

Janice M. Gordon, Gonzalo Molina Sieiro, Kimberly M. Ellis and Bruce T. Lamont

Advisors play a key role in the mergers and acquisitions (M&A) process, but research to date has rarely focused on how their influence impacts these transactions. The present…

Abstract

Advisors play a key role in the mergers and acquisitions (M&A) process, but research to date has rarely focused on how their influence impacts these transactions. The present chapter takes stock of the present literature on M&A advisors from finance, economics, and management in order to integrate the currently diverging research traditions into a coherent framework. The current research has focused on proximal acquisition outcomes, like acquisition premiums or expected performance in the form of cumulative abnormal returns, but there is limited theoretical understanding of the advisors impact on the post-acquisition period. Moreover, while the role of advisor reputation has been highlighted on both the management and finance literatures as an important aspect of the role advisors play in the M&A process, there seems to be much to be addressed. Furthermore, and perhaps most importantly, the nature of the relationship between the advisor and the acquirer or target presents challenges to researchers where the advisor acts both as a provider of expertise in the M&A process, but may be simply acting on their own best interest. The new framework that the authors present here provides management scholars with a roadmap into a cohesive research agenda that can inform our theoretical understanding of the role of M&A advisors.

Details

Advances in Mergers and Acquisitions
Type: Book
ISBN: 978-1-78973-599-4

Keywords

Article
Publication date: 26 September 2023

Jian-Ren Hou, Yen-Hsi Li and Sarawut Kankham

As an alternative to hiring financial specialists or investment consultants, robo-advisors offer financially automated investment services. This study aims to investigate how robo…

216

Abstract

Purpose

As an alternative to hiring financial specialists or investment consultants, robo-advisors offer financially automated investment services. This study aims to investigate how robo-advisors' service attributes, risk attitude and financial self-efficacy influence customers' choice preferences of adopting robo-advisors.

Design/methodology/approach

Two hundred fifty-one online surveys were used to collect data, and choice-based conjoint analysis was conducted.

Findings

Results show that increasing annual fees negatively impact customers' choice preferences. Promotion, general investment education and additional human assistance have a positive impact. Furthermore, risk-seeking and risk-averse customers require more human assistance than risk-neutral customer and customers with high levels of financial self-efficacy prefer more general investment education and additional human assistance than those with lower levels. In addition, customers in the older age group prefer promotion, general investment education and additional human assistance, while wealthy customers prefer lower annual fees, higher general investment education and more additional human assistance compared to middle-class and low-income groups.

Originality/value

This study contributes to robo-advisor providers to provide appropriate service attributes for each customer group.

Details

Information Technology & People, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0959-3845

Keywords

Abstract

Details

Investment Traps Exposed
Type: Book
ISBN: 978-1-78714-253-4

Book part
Publication date: 1 May 2012

Wallace N. Davidson, Shenghui Tong and Pornsit Jiraporn

Some firms choose not to use an investment bank advisor in mergers and acquisitions (M&A) transactions. We test whether this decision affects the merger announcement period…

Abstract

Some firms choose not to use an investment bank advisor in mergers and acquisitions (M&A) transactions. We test whether this decision affects the merger announcement period returns. We compare the abnormal returns from a sample of 179 in-house acquisitions (in which either the acquirer or the target firm does not hire an investment bank advisor) to those of a matched sample of acquisitions (in which all firms hire an investment bank advisor). We find that not employing a financial advisor has no significant effect on the abnormal returns of acquiring firms but does reduce the abnormal returns of target firms. This relation holds even after controlling for various firm and merger characteristics.

Details

Research in Finance
Type: Book
ISBN: 978-1-78052-752-9

Abstract

Details

Navigating the Investment Minefield
Type: Book
ISBN: 978-1-78769-053-0

Book part
Publication date: 14 September 2022

Mazhar Islam, Carmen Weigelt and Haemin Dennis Park

We consider conditions under which firms hire an intermediary advisor in acquisition deals. Although acquirers pay large advisory fees to investment banks for their assistance in…

Abstract

We consider conditions under which firms hire an intermediary advisor in acquisition deals. Although acquirers pay large advisory fees to investment banks for their assistance in acquisitions, we know little about the conditions under which acquirers form a relationship with an investment bank for an acquisition deal. Specifically, we examine the role of overall acquisition experience, acquisition experience specific to the target’s industry, prior relationship-specific experience, and deal size in relationship formation and continuation. We test their hypotheses using a dataset of US-based acquirers and targets between 1991 and 2015. Our findings provide nuanced insights into the role of acquisition experience for acquirer–investment bank pairing up on acquisition deals.

Abstract

Details

Investment Traps Exposed
Type: Book
ISBN: 978-1-78714-253-4

Article
Publication date: 28 July 2021

Ankita Bhatia, Arti Chandani, Rajiv Divekar, Mita Mehta and Neeraja Vijay

Innovation is the way of life and we see various innovative techniques and methods being introduced in our daily life. This study aims to focus on digital innovation in the wealth…

2373

Abstract

Purpose

Innovation is the way of life and we see various innovative techniques and methods being introduced in our daily life. This study aims to focus on digital innovation in the wealth management domain. This study examines the effect of usage of robo-advisory services in investment decision-making and behavioural biases, i.e. overconfidence and loss aversion. Such studies are more pronounced in developed countries and little has been studied about investor behaviour in association with advisory services in developing countries such as India.

Design/methodology/approach

Overconfidence and loss-aversion biases, investment decision-making and advisory services questions are measured using a five-point Likert scale. The number of respondents was 172 investors. A purposive sampling is used for gathering responses from investors. Structural equation modeling model was run using AMOS 22 version software package.

Findings

The authors found that behavioural biases positively and significantly influence the irrationalities of investment decision-making. The findings of this study also provide empirical evidence that the usage of robo-advisory services, by individual investors, is still incapable of mitigating behavioural biases, such as overconfidence bias and loss-aversion bias.

Research limitations/implications

The sample size of this study could be a limiting factor. This study is limited only to two biases, while other behavioural biases affect the investment decision-making of the investors, which can be considered for future research along with the impact of robo-advisory services in different socio-cultural backgrounds.

Practical implications

This study will assist fintech start-ups, banks, architecture of robo advisors, product owners and wealth management service providers improvise their products, platforms and offerings of these automated advisory services. This could help individual investors to mitigate their behavioural biases in investment decision-making.

Social implications

This study is useful to society as the awareness of robo-advisory services is very less, at present, and there is a need to increase the usage of these services to extend the benefit of this to the lower stratum of society. These services would be useful to all investors who find it difficult to afford financial advisors and help them mitigate their behavioural biases for investment decision-making.

Originality/value

This study is the first of its type that establishes the linkage between behavioural biases, digital innovation in fintech, i.e. robo-advisory services and individual investor’s investment decision-making in individual investor of the Indian stock market.

Details

International Journal of Innovation Science, vol. 14 no. 3/4
Type: Research Article
ISSN: 1757-2223

Keywords

Article
Publication date: 1 October 2006

Edward J. Stendardi, Judy F. Graham and Mary O’Reilly

To research the gender literature in order to determine whether it is advisable for a financial advisor to adjust their planning and advising processes based on the gender of…

2602

Abstract

Purpose

To research the gender literature in order to determine whether it is advisable for a financial advisor to adjust their planning and advising processes based on the gender of their client.

Design/methodology/approach

To correlate the gender literature with the personal financial planning process in order to determine whether advisors should adjust their approach based on the gender of their client.

Findings

The gender literature reveals significant differences concerning how men and women invest; consequently, it is felt that it is advisable for financial advisors to tailor their approach based on the gender of their client.

Research limitations/implications

The financial planning process should be modified to incorporate the gender of the client.

Practical implications

Financial advisors should tailor their approach to the gender of their clients in order to ideal with them more effectively.

Originality/value

As female investors grow in importance, processes should be modified or adjusted in order to accommodated their preferences.

Details

Humanomics, vol. 22 no. 4
Type: Research Article
ISSN: 0828-8666

Keywords

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