Abstract: Investors have difficulties making optimal long-term financial decisions for reasons such as
shortsightedness, a lack of financial sophistication, and an inability to self-regulate. Using propriety data
collected during the 2007 recession, a period where investors lost over $8 billion by making impulse
investment decisions, this study examines the impact of professional financial advice on an investor’s commitment to long-term financial goals. Results suggest that investors who use a professional financial advisor are about one-and-a-half times more likely to adhere to long-term investment decisions. Additionally, investors with a written financial plan are almost twice as likely to make optimal long-term financial decisions. Read the full paper
