Client involvement in expert advice: Antibiotics in finance?

Arbeitspapier

We use minutes from 17,000 financial advisory sessions and corresponding client portfolio data to study how client involvement affects advisor recommendations and portfolio outcomes. We find that advisors confronted with acquiescent clients stick to standards and recommend expensive but well diversified mutual fund portfolios. However, if advisors meet with clients who voice own ideas they deviate markedly from their standards, resulting in poorer portfolio diversification and lower Sharpe ratios. Our findings that advisors cater to client requests parallel the phenomenon of doctors prescribing antibiotics to insistent patients even if inappropriate, and imply that pandering diminishes the quality of advice.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: SAFE Working Paper ; No. 219

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Household Saving; Personal Finance ; Portfolio Choice; Investment Decisions ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Thema: financial advice ; individual investors ; client involvement

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Hackethal, Andreas ; Laudenbach, Christine ; Meyer, Steffen ; Weber, Annika
• Ereignis: Veröffentlichung
• (wer): Goethe University Frankfurt, SAFE - Sustainable Architecture for Finance in Europe
• (wo): Frankfurt a. M.
• (wann): 2018

Weitere Informationen

• DOI: doi:10.2139/ssrn.3178664
• Handle: http://hdl.handle.net/10419/181655
• URN: urn:nbn:de:hebis:30:3-472031
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ