Access to forecasts and information asymmetry in financial advice
The information asymmetry between suppliers and customers in the investment product markets, as in others, is to blame for its imperfect functioning. The availability of analysis and forecasts for suppliers and not for clients is one important element of the problem. Good advice can alleviate it.
When analyzing the credibility and usefulness of economic and market forecasts, some financial advisers consulted and surveyed by EFPA recently point out the limited access to analysis and forecasts available to investors, unlike to professionals themselves. This is one of the elements that make up the so-called information asymmetry that dominates this and other economic industries and markets, and that leads to the imbalance in the decision-making capacity between supply and demand, in short, to a certain inefficiency of the market. Asymmetric information can derive from specialization and knowledge, which is logical and justifiable, or it can come from a lack of transparency in the market, in which case the consequences tend to be more damaging for those who suffer from misinformation. In investment services, the information asymmetry can become especially acute for both reasons and for an entrenched lack of investment education in individuals and families that aggravates cognitive and emotional biases. They are well studied in economics and behavioral finance, but with little real impact in order to......
The European Federation of Financial Advisers and Financial Intermediaries (FECIF) was chartered in June 1999 for the defence and promotion of the role of financial advisers and intermediaries in Europe.
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