Impact of Financial Advice on Investment Consistency: Evidence From ESG and Cryptocurrency Investors

As individual investors increasingly flock toward cryptocurrency and Environmental, Social, and Governance (ESG) products, understanding the drivers behind these choices is critical for market stability. This study utilizes nationally representative data from the 2021 and 2024 National Financial Capability Study (NFCS) Investor Surveys to examine the “ESG-crypto paradox,” a phenomenon where ESG-oriented retail investors are more likely to hold digital assets despite their known environmental footprint. Applying Probit and Instrumental Variable (IV) Probit estimations, the results reveal a significant positive association between high ESG preferences and ownership of crypto assets. Interestingly, while financial advice generally has a negative standalone impact on crypto investment due to the risk-mitigating role of fiduciaries, it acts as a positive moderator for ESG-conscious clients. The analysis further identifies an “illusion of knowing,” where high subjective confidence masks a lack of objective literacy, often fueled by social media narratives. These findings provide crucial insights for policymakers and researchers on the necessity of standardized risk labeling and targeted financial education to help investors navigate the discrepancies between innovative digital assets and sustainable investment values in the U.S. market.