The impact of neo-brokers on the overconfidence bias of young retail investors in Germany

Abstract

Neo-brokers play an essential role in the increase of young retail investors in Germany. Providing commission-free, low-cost trading and an engaging user experience, neo-brokers stimulate the investment behavior of young investors. By collecting data through an online survey, the impact of neo-brokers in Germany on the overconfidence bias of young retail investors will be examined. Setting up hierarchical binary logistic regression models, the study finds that young retail investors trade more frequently when investing through neo-brokers. However, there is no evidence that men trade more than women and thereby achieve lower returns when using neo-brokers