Switching from commissions on mutual funds to flat-fees: How are advisory clients affected?
- Using a field study at a German brokerage, we investigate advised individual investors’ behavior and outcomes after self-selecting into a flat-fee scheme (percentage of portfolio value) for mutual funds. In a difference-in-differences setting, we compare 699 switchers to propensity-score-matched advisory clients who remained in the commission-based scheme. Switchers increase their portfolio values, improve portfolio diversification, and increase their portfolio performance. They also demand more financial advice and follow more advisor recommendations. We argue that switchers attribute a higher quality to the unchanged advisory services.
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| Author: | Steffen MeyerORCiDGND, Charline UhrORCiDGND, Benjamin LoosORCiDGND, Andreas HackethalORCiDGND |
|---|---|
| URN: | urn:nbn:de:hebis:30:3-770923 |
| DOI: | https://doi.org/10.1016/j.jebo.2023.03.015 |
| ISSN: | 0167-2681 |
| Parent Title (English): | Journal of economic behavior & organization |
| Publisher: | Elsevier |
| Place of publication: | Amsterdam [u.a.] |
| Document Type: | Article |
| Language: | English |
| Date of Publication (online): | 2023/04/04 |
| Date of first Publication: | 2023/04/04 |
| Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Release Date: | 2024/01/16 |
| Tag: | Consumer financial protection; Financial advice; Household finance; Individual investor; Inducements |
| Volume: | 209 |
| Page Number: | 27 |
| First Page: | 423 |
| Last Page: | 449 |
| Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
| Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Licence (German): |  Creative Commons - CC BY - Namensnennung 4.0 International |
