Financial Advisors and the Intergenerational Transmission of Investment Behavior
Type
discussion paper
Date Issued
2026-06-11
Author(s)
Graef, Frank
;
Daniel Hoechle
;
Schmid, Markus
Abstract
Children tend to hold the same securities as their parents, but why? Using account-level data from a medium-sized retail bank, we show that shared financial advisors significantly amplify this intergenerational similarity. When parents and children have the same advisor, the likelihood that children hold a parental security more than doubles, and trading synchronization increases threefold, with 85% of synchronized trades among same-advisor pairs occurring on the very same day. Using detailed data on advisor-client contacts, we decompose this effect into two distinct channels: cross-selling and spillovers of advice within families. The same-advisor effect increases with advisor distinctiveness, extends to adjustments in the equity share, and carries an unintended cost: because same-advisor parents and children hold more overlapping portfolios, their family-level diversification gain is smaller than that of families with different advisors. Financial advisors emerge as important but previously unrecognized actors for the intergenerational transmission of investment behavior.
Language
English (United States)
HSG Classification
contribution to scientific community
Refereed
No
Subject(s)
Division(s)
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Name
GraefHoechleSchmid_AdviceInvestments_11June26.pdf
Size
700.39 KB
Format
Adobe PDF
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