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Abstract
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.
Original language | English |
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Journal | Journal of Economic Behavior & Organization |
Volume | 209 |
Pages (from-to) | 423-449 |
Number of pages | 27 |
ISSN | 0167-2681 |
DOIs | |
Publication status | Published - May 2023 |
Keywords
- Consumer financial protection
- Financial advice
- Household finance
- Individual investor
- Inducements
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Dive into the research topics of 'Switching from commissions on mutual funds to flat-fees: How are advisory clients affected?'. Together they form a unique fingerprint.Activities
- 1 Participation in or organisation af a conference
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American Finance Association Meetings: 2020
Uhr, C. (Speaker) & Meyer, S. (Speaker)
2 Jan 2020 → 5 Jan 2020Activity: Participating in or organising an event types › Participation in or organisation af a conference