Keeping Your Financial Planner to Yourself: Racial and Cultural Differences in Financial Planner Referrals
Literature suggests that the use of a financial expert by Black households improves savings and investment behaviors. However, these households lack the financial knowledge and sophistication needed to select an appropriate financial expert. This admitted inability results in Black households relying on the recommendations of friends and family in selecting and hiring a financial expert. However results from this study suggest that Blacks who have successfully chosen a financial expert, i.e., are satisfied, are nearly two times (92 %) less likely than non-Blacks to refer their financial planner to others. Decomposition analyses indicate that over 80 % of satisfied Blacks should be willing to provide a referral yet only 50 % do. The largest significant component of the difference in referral rates is culturally based perception differences of the variables used in determining the net benefit of providing a referral. Copyright Springer Science+Business Media New York 2013
Volume (Year): 40 (2013)
Issue (Month): 2 (June)
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