Encouraging Broker and Adviser Background Checks: A Randomized Study on Twitter

22 Pages Posted: 12 Nov 2018 Last revised: 4 Nov 2019

See all articles by K. Jeremy Ko

K. Jeremy Ko

Upstart

Sai Rao

Division of Economic and Risk Analysis, U.S. Securities and Exchange Commission

Parth Venkat

University of Alabama - Department of Economics, Finance and Legal Studies

Date Written: November 29, 2018

Abstract

We conducted a randomized online study of messaging on twitter to encourage retail investors to check the background of their investment professional. Our study tested different tweets attempting to motivate investors by emphasizing aspirations, mistrust, and loss aversion. We found that our motivational tweets did not perform better than our control informational tweet. In contrast, there appears to be evidence that shorter, simpler calls to action worked best in promoting views, engagements, and clicks on the SEC website. There is also some evidence of greater (lower) engagement at the beginning (end) of the week. Finally, there was only limited attrition in views and engagements over time with high turnover in accounts engaging tweets over the course of the study.

Keywords: randomized control trial, social media, brokers, investment advisers, behavioral finance

JEL Classification: D14, D18, G02, G24

Suggested Citation

Ko, Kwangmin and Rao, Sai and Venkat, Parth, Encouraging Broker and Adviser Background Checks: A Randomized Study on Twitter (November 29, 2018). Sixth Annual Conference on Financial Market Regulation, Available at SSRN: https://ssrn.com/abstract=3281879 or http://dx.doi.org/10.2139/ssrn.3281879

Kwangmin Ko (Contact Author)

Upstart ( email )

2950 S Delaware St #300
San Mateo, CA 94403
United States
2022570741 (Phone)

Sai Rao

Division of Economic and Risk Analysis, U.S. Securities and Exchange Commission ( email )

100 F Street NE
Washington, DC 20549
United States

Parth Venkat

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States

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