Financial Advice and Bank Profits

• 成果类型: Article
• 署名作者: Hoechle, Daniel; Ruenzi, Stefan; Schaub, Nic; Schmid, Markus
• 署名单位: FHNW University of Applied Sciences & Arts Northwestern Switzerland; University of Mannheim; University of St Gallen
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhy046
• 发表日期: 2018
• 页码: 4447
• 关键词: performance; RISK; profitability; investors; management; earnings; BROKERS

摘要

We use a unique data set from a large retail bank containing internal managerial accounting data on revenues and costs per client to analyze how banks and their financial advisors generate profits with customers. We find that advised transactions are associated with higher profits than independently executed trades of the same client. The bank's own mutual funds and structured products are most profitable for the bank, and profits increase with trade size. We show that advisors recommend exactly those transactions. Furthermore, we find that advised clients achieve a worse performance than independent clients, suggesting that advisors put their employer's interest first.