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.
|Status||Udgivet - 2020|
|Begivenhed||American Finance Association Meetings: 2020 - USA, San Diego|
Varighed: 2. jan. 2020 → 5. jan. 2020
|Konference||American Finance Association Meetings|
|Periode||02/01/2020 → 05/01/2020|