Regulatory focus and investment advisers' recommending behavior

Soo Yeong Ewe, Christina Kwai Choi Lee, Ferdinand A. Gul

Research output: Contribution to journalArticleResearchpeer-review

5 Citations (Scopus)


Purpose: This study examines the effect of a regulatory-focused prime (i.e. a brochure with a picture and message) on the recommending behavior of investment advisers in the context of an investment decision. Design/methodology/approach: Three experiments were conducted with 468 participants, mostly from the financial services industry. Study 1 examined the direct effect of a regulatory-focused prime on an investment adviser's recommending behavior, whereas Study 2 examined the moderating role of regulatory fit on such behavior. Study 3 validated the findings. Findings: The results provide evidence that a message using visual and textual cues based on a promotion and prevention regulatory focus may trigger a preference in an investment adviser's product recommendation. A promotion (prevention)-focused framed message will trigger the recommendation of an investment plan with a higher but riskier (safe and stable) potential return. However, when the same prime is presented with details of a performance incentive scheme, the effect of the prime is reduced when there is a regulatory nonfit between the prime and the message relating to the performance incentive scheme. Practical implications: The findings highlight the importance of understanding how regulatory-focused stimuli may subconsciously influence the recommendation of investment advisers as heuristics used in decision-making, thereby influencing their clients' investment decisions. Originality/value: Past studies have focused on how regulatory-focused visual and message cues influence consumer decision-making. This study provides empirical evidence regarding the influence of regulatory-focused prime on an investment adviser's behavior when providing investment advice.

Original languageEnglish
Pages (from-to)107-126
Number of pages20
JournalInternational Journal of Bank Marketing
Issue number1
Publication statusPublished - 3 Feb 2021


  • Performance incentive
  • Recommending behavior
  • Regulatory focus
  • Visual cue

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