Nudging ESG investments via digital financial advising. Evidence from an investment game experiment.

The experiment aims at studying how financial advisors’ recommendations can influence retail investor preferences toward sustainable investments and the resulting demand for these products. In particular, the experiment will simulate a real meeting session with a financial advisor, by means of a pre-recorded audio-video with a person (a real human being) impersonating a financial advisor from a fictional international financial advising association. Participants will be divided into two groups: a treated group and a control group. After measuring a set of variables related to the assessment of the client profile in line with the actual regulation, the respondents will express their preferences toward sustainable investments; then, they will watch the video in which the financial advisor gives some recommendations on how to invest their money. The treated and the control group will watch the same video, except for the last part. On the one hand, the treated group will hear the advisor giving detailed information on sustainable investments and suggesting their inclusion in the client’s portfolio. On the other hand, the control group will hear the advisor talking about the normative framework related to financial advisory services. After this video, the subjects will participate in an investment game in which they are asked to allocate some money among different investment funds, including a sustainable fund. The risk and return characteristics of the funds will be displayed. This will allow us to measure the effect of the treatment, consisting in the advisor’s suggestion to invest in sustainable products, compared to the control group. The research questions are the following: RQ1) Do financial advisor’s suggestions affect the allocation of retail investors in the sustainable investment fund? RQ2) Do financial advisor’s suggestions moderate the relationship between declared sustainable preferences and the percentage allocated in the sustainable investment fund?