Regulating inattention in fee-based financial advice

• 成果类型: Article
• 署名作者: Edelen, Roger M.; Fong, Kingsley Y. L.; Han, Jingyi
• 署名单位: Virginia Polytechnic Institute & State University; University of New South Wales Sydney
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2024.103985
• 发表日期: 2025
• 关键词: Nudges; Default choice; disclosure; Future of Financial Advice (FOFA); Mutual funds; household finance

摘要

We study the impact of disclosure and inattention on the decision to retain fee-based financial advice using a two-tiered natural regulatory experiment. Increased salience in fee disclosure raises the drop rate for advice, implying improved attention - particularly for relatively sophisticated investors. However, a novel auto-drop requirement for inattentive investors generates far more drops, implying limited attention despite salient disclosure - particularly for the unsophisticated. Contrary to studies of commission-based advice, we find that investors benefit from fee-based advice. Benefits are higher for less sophisticated investors, who tend to be detrimentally auto-dropped. Drops triggered by salient disclosure tend to be beneficial.