Does family affect financial outcomes and psychological biases? Evidence from small investors in Bangladesh

Purpose The purpose this paper is to investigate whether family affects financial outcomes and psychological biases in an under-researched context, Bangladeshi small investors. Design/methodology/approach To achieve the stated research objective, the survey data were collected from 223 small investors from brokerage houses in Dhaka and estimated using regression analysis. Findings The results indicate that learning from parents, discussion with parents about financial issues and father’s education have the strongest impact on financial outcomes (i.e. financial wealth holding, portfolio value, investment strategy, technical indicator, past perceived and expected portfolio performance) and psychological biases (i.e. herding, risk tolerance and better-than-average). Furthermore, spouse’s education, parental income, marital status and family size explain financial outcomes and psychological biases, but to a lesser extent. Practical implications The implications have been discussed for small investors and the family’s role in resulting positive financial outcomes and avoid biases. Originality/value This is the first study to take into account a set of family background variables influencing various financial outcomes and psychological biases in the context of Bangladesh.