Same bank, same clients but different pricing: How do flat-fees for mutual funds affect retail investors

Benjamin Loos, Steffen Meyer*, Charline Uhr, Andreas Hackethal

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Abstrakt

What happens when a bank introduces a flat-fee pricing scheme for trading mutual funds to its brokerage clients while leaving everything else unchanged? Only 1.26% of clients adopt the fee scheme. Adopters have been using financial advice and are less prone to inertia. Difference-in-differences analyses of previously advised clients reveal that flat-fee clients seek and follow more advice and improve their portfolio efficiency. A second field experiment, with a large branch bank replicates the main results. We suggest that flat-fees increase trust in advisor quality and reject alternative explanations, like cost-advantages, sunk-cost fallacy, novelty effects or advisor (time) fixed effects.
OriginalsprogEngelsk
Publikationsdato2020
Antal sider75
StatusUdgivet - 2020
BegivenhedAmerican Finance Association Meetings: 2020 - USA, San Diego
Varighed: 2. jan. 20205. jan. 2020

Konference

KonferenceAmerican Finance Association Meetings
LokationUSA
BySan Diego
Periode02/01/202005/01/2020

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