Where is the Intersection of Madison Avenue and Wall Street? Advertisement, Local Access to Investment Advice, and Stock Market Participation

We examine the effects of advertisement by investment advisory firms on household stock market participation. Exploiting variation in exposure to financial advertising for households along designated market area (DMA) borders, we find evidence that increased advertising by investment advisory firms leads to higher stock market participation. Importantly, the effects are concentrated in counties where the advertising firm has a physical presence. Consistent with fixed cost frictions to participation, these effects are predominantly among higher income households. We also find larger effects in counties with higher income and racial diversity - areas that are likely to have lower trust. Our results highlight the complementary nature of persuasive advertising and local access to finance for building trust in the market for investment advice.