Location Decisions of Domestic and Foreign-Affiliated Financial Advisors: Australian Evidence

Robert Faff*, Tribeni Lodh, Jerry Pawada

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

1 Citation (Scopus)
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Abstract

We examine two views of the location choice of newly qualified personal financial advisors that recommend fund managers to retail investors. In one, sources of investment pools are the determinants of the location choice of financial advisors (the 'source of funds' hypothesis). In the other, investment advisors learn from and mimic the location of competing industries (the 'knowledge spill-over' hypothesis). We also investigate whether ownership structures, such as institutional and foreign affiliation, affect the location choices of advisors. Overall, advisor location is determined by considerations for the profitability of an area as a source of both investment funds and potential information spillovers from competitors. Institutional affiliation may result in differences in the set of relevant location choice factors, but does not detract from our main findings.

Original languageEnglish
Pages (from-to)207-228
Number of pages22
JournalJournal of Financial Services Research
Volume42
Issue number3
DOIs
Publication statusPublished - Dec 2012
Externally publishedYes

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