| A stable capital market is not only an important guarantee for financial support to China's high-quality economic development,but also the basis for giving full play to the “hematopoietic” function of the capital market.After three decades of reform and development,China's basic capital market system has been continuously improved and its ability to serve the real economy has been significantly enhanced.However,the investor structure dominated by individual investors in China's stock market has not fundamentally changed.The market has been characterized by “high volatility,high trading volume and high turnover rate” for a long time,and the risk of residents participating in stock investment is high.Compared with institutional investors,individual investors have smaller capital scale,relatively lack of professional investment knowledge and difficult access to information.In the investment process,they are easy to make irrational investment decisions due to blindness and emotion,resulting in investment losses.According to the profit data of various investors reported in the Statistical Yearbook of Shanghai Stock Exchange(Volume 2018),the total profit of various investors in 2017 was 3453.5 billion yuan,of which the profit of natural person investors was 310.8 billion yuan,which means that the profit of individual investors with 99.78% of accounts and 21.20% of market value accounted for only 9%.According to the data of China Household Finance Survey(CHFS),in the five rounds of surveys in 2011,2013,2015,2017 and 2019,the proportion of households with stock investment losses was 56.3%,69.4%,56.4%,57.9% and 60.8% respectively.Households participated in the stock market with “less profit and more loss”.In order to protect the interests of individual investors and change the poor stock investment returns of individual investors,China's financial regulatory authorities and financial institutions have long been committed to holding various types of financial education activities,promoting investment consulting business and services,and constantly guiding investors' rational investment and long-term investment.On the one hand,studies have confirmed that lack of financial literacy and irrational behavior are important reasons for poor investment performance of Chinese shareholders.Since 2013,financial institutions have regularly held financial literacy popularization activities for investors every year.The People's Bank of China has designated September as the “Financial Literacy Popularization Month” and the China Securities Regulatory Commission(CSRC)has set May 15 as the “May 15 National Investor Protection Publicity Day” every year.Investors can receive financial education through various channels provided by financial institutions and industry self-discipline organizations.On the other hand,better financial advice services are also sought by governments and institutions.Financial investment has a high professional knowledge threshold.In reality,it is difficult to train every investor into a financial professional.Seeking financial advice is a simpler way to improve household investment decision-making(Drexler et al.,2014).The CSRC issued the Interim Provisions on Securities Investment Consulting Business in 2010,which aims to standardize the investment consulting business of securities companies and securities investment consulting institutions and protect the legitimate rights and interests of investors.In 2019,the CSRC issued the Notice on The Pilot Work of Investment Consultancy Business of Public Offering of Securities Investment Fund,which officially started the pilot reform of securities investment consultancy business,aiming to provide long-term funds for the capital market and improve the “sense of gain” of residents' investment returns.However,although the above measures have been carried out for a long time,from the existing research results,scholars at home and abroad do not hold a consistent view on the effect of financial education and financial advice.What is more noteworthy is that most of the studies on the effect of financial education and financial advice are foreign literature,pay more attention to the capital market of developed countries,and pay little attention to China's capital market.Different from the stock markets of Britain,the United States,Japan and other countries,China's stock market is still in its “youth period”,with many retail investors,imperfect systems and lagging construction of supporting laws and regulations.The stock market is highly volatile and presents a typical “policy market”,with uniqueness,periodicity,asymmetry and regionality,the empirical research conclusions of other countries cannot be automatically extended to China.In recent years,in order to strengthen the protection of the rights and interests of small and medium-sized investors and enhance the sense of acquisition of investors.The regulatory authorities are committed to holding various types of financial education activities and promoting the reform of investment consulting business.However,few studies have used Chinese investor data to explore the impact of financial education and financial advice on stock investment returns,that is,whether they help to improve the stock investment returns of individual investors is unclear.Based on the above background,this study intends to use the large-scale micro survey data of individual investors in China's stock market from 2018 to 2020 to deeply explore the impact of financial education and financial advice on stock investment returns,and compare the effect of financial education and financial advice.The main conclusions of this study are as follows:(1)This study finds that whether from the profit and loss of stock investment or from the level of investment income,the lack of financial litercay,less investment experience and disposition effect have a significant negative impact on stock investment return.The higher the household investable assets,the higher the possibility of stock profit and the level of investment income.(2)As the basic institutional arrangement of China's capital market,financial education is an important channel for individual investors to obtain financial literacy and improve investment skills.This study finds that financial education can not only improve the possibility of investors' stock profit,but also help to improve the level of investors' stock investment income.Financial education promotes the improvement of investors' stock investment income by cultivating and forming a good habit of stopping profits and losses and improving the level of risk-taking.Financial education plays a greater role in promoting stock investment returns of investors in areas with low degree of investor protection,relative lack of investment experience and low household wealth.(3)Over the past decade,China has added an average of 16 million natural person investor accounts every year.The huge group of new investors has aroused scholars' concern about whether it has the ability to deal with complex financial products and information and make wise investment decisions.This study finds that seeking professional financial advice can not only improve the probability of investors' stock profit,but also help to improve the level of investors' investment return.Financial advices promote the improvement of investors' stock returns by alleviating the negative impact of low financial literacy,disposition effect and low level of trust on investment returns.Further analysis shows that the promotion effect of financial advices on investors' stock returns is more obvious in areas with low development level of securities intermediaries and investors aged 45 and below.(4)This study finds that,compared with investors who have neither received financial education nor used financial advice,both receiving financial education and using financial advice have the greatest effect on investors' stock returns,followed by only receiving financial education and finally using financial advice.The two main ways to make up for the lack of financial literacy and improve investment decision-making are financial education and financial adcice,which have a positive role in promoting the stock investment income of Chinese individual investors.The innovation of this study is mainly reflected in the following three aspects:(1)The conclusions of this study provide academic support for China's financial sector to continue to promote financial education activities.The scope of financial education projects abroad(mainly in the United States)is relatively wider and the research literature are relatively rich,but the implementation effect is controversial.China's financial education is mainly promoted by financial institutions such as securities companies,mainly for securities investors,and there are relatively few research literatures.In addition,this study found a conclusion consistent with Zhang et al.(2016),that is,the higher the household wealth level,the more profitable the investors are in the investment.This study also finds that at the current stage,financial education plays a greater role in promoting the stock investment income of investors with low household wealth,which not only provides a possible explanation for the widening gap between the rich and the poor,but also provides a basis for government decision-making departments to reduce the gap between the rich and the poor and promote the formulation of common prosperity policies.(2)The research innovation of financial advice is mainly reflected in the research content and conclusions.From the research content,the existing studies mainly discuss who uses financial advice,the relationship between financial literacy and financial advice,and the comparison of investment returns between those who use financial advice and independent decision-makers.However,there is little literature to explore the mechanism of financial advice affecting stock investment returns.This study analyzes and confirms the possible influence mechanism from three perspectives: financial literacy,disposition effect and trust,which is a useful supplement to the existing literature.From the research conclusion,this study finds that financial advice helps to improve the investment income of Chinese shareholders.This conclusion is different from the relevant research carried out for investors in western countries.This study believes that the reasons for this difference are: first,compared with foreign investors,the financial literacy of Chinese shareholders is low,and the “policy market” characteristics of Chinese stock market are obvious,Stock price volatility is high,investment decision-making is difficult,and financial advice play a greater role in helping Chinese investors' investment performance.Second,there are differences in the business models of investment advisory.The income source of China's investment advisory business is mainly stock trading commission,which does not directly charge investment advisory service fee and account management fee.However,the stock trading commission has been declining in recent years.The conflict of interest under this business model has little impact on investors' investment income.However,this study is not to provide evidence support for maintaining the current investment advisory business model.On the contrary,this study believes that it is necessary to continue to deepen the reform of investment consulting business.This study finds that the proportion of Chinese investors using financial advice is still very low,and their entrusted investment awareness and risk awareness are not high,which does not match the growing wealth management needs of residents.(3)By bringing the two main ways to make up for the lack of financial literacy and improve investment decision-making,financial education and financial suggestions into the same research and analysis framework,this study intuitively compares and analyzes their effects.The conclusions can provide useful empirical evidence for the formulation of financial supervision policies,the promotion of related businesses of financial institutions and the decision-making of individual investors. |
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