Sustainable investment preferences and how they are delegated

According to a recent amendment to the EU-wide MiFID II regulation, financial institutions are required to elicit their clients’ sustainability preferences. Through this regulation change, sustainability has found a natural entry point into consultations between financial advisors and clients. This dissertation explores the impact of sustainability-related financial advice on investment behavior. Comprising three distinct chapters, it delves into the dynamics of financial advisors' role in promoting sustainable investments. Overall, this dissertation shows that financial advisors may foster sustainable investing by providing information to clients during the buying decision, even though this information does not affect the sustainability of portfolios in the long-term. However, selling behavior is less influenced by new information on the sustainability of firms. The findings also reveal that financial advisors charge a premium for sustainable investing mandates and clients who cannot signal high financial literacy bear the burden of higher fees.