Abstract:
The paper examines the determinants of investors’ willingness to pay (WTP) for suitable advice. We
use contingent valuation, a method frequently used to estimate the value of non-market goods and
services, with a unique survey data to estimate WTP for suitable advice. We find that investors with
a high level of financial literacy recognize the value of financial advice; therefore, they have a higher
WTP. These investors are also less likely to consult with a financial adviser if the advisory fee exceeds
investors’ maximum WTP. We also suggest the policy implications of our empirical results.
