Research on the Impact of Financial Advisory Services on the Diversification Level of Household Portfolios

Abstract

With the continuous improvement of household financial asset scale and the increasing complexity of financial markets, household portfolio diversification has become an important means to reduce investment risks and optimize asset allocation. Financial advisory services, as a professional financial intermediary service, play a crucial role in guiding households to make rational investment decisions and improving portfolio diversification. Based on the theory of modern portfolio, behavioral finance and financial intermediation, this paper selects the micro data of household financial survey to empirically test the impact of financial advisory services on the diversification level of household portfolios. The research results show that: financial advisory services can significantly improve the diversification level of household portfolios, and this promotion effect has heterogeneity among households with different financial literacy, asset scale and risk preference; the mechanism test shows that financial advisory services can improve household portfolio diversification by alleviating household behavioral biases and improving household financial literacy. Finally, based on the research conclusions, this paper puts forward policy suggestions to optimize financial advisory services and guide households to achieve scientific portfolio diversification. This study enriches the research on the factors affecting household portfolio diversification and provides theoretical and empirical support for the development of financial advisory industry and the improvement of household financial decision-making ability.