Influence of Investor and Advisor Big Five Personality Congruence on Futures Trading Behavior

Abstract : This study attempts to assess the influence of investor-advisor personality congruence on the trading behavior of futures investor. This research tested the hypotheses based on the unique data set collected from 408 investor-advisor dyads in the Chinese futures market. Our main data source is the actual trading data of futures investors that we obtained directly from futures brokerage firms in China. We performed Ordered Probit estimation to investigate the influence of investor-advisor personality congruence on trading frequency. Our results provide empirical evidence that investors tend to trade more futures when investor and advisor have congruence on openness, conscientiousness, and agreeableness. In contrast, investor-advisor congruence on neuroticism dampens investor's futures trading. This research postulates that individual investors trade differently if they have personality congruence (incongruence) with their advisors. Therefore, it is recommended that policymakers should consider investor-advisor personality congruence to enhance their business performance in the retail investor services industry.