Unlocking clients: The importance of relationships in the financial advisory industry

• 成果类型: Article
• 署名作者: Gurun, Umit G.; Stoffman, Noah; Yonker, Scott E.
• 署名单位: University of Texas System; University of Texas Dallas; Indiana University System; Indiana University Bloomington; IU Kelley School of Business; Cornell University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.04.026
• 发表日期: 2021
• 页码: 1218-1243
• 关键词: Financial adviser; Relationships; trust; Clients; FLOWS; Noncompete agreement; Broker protocol; misconduct

摘要

We investigate the importance of client relationships in the financial advisory industry. We exploit firm-level variation in adoption of the Broker Protocol, which enabled clients to follow their advisers to member firms without fear of litigation. We show that advisers' ability to maintain client relationships is a significant predictor of their employment decisions; that about 40% of client assets follow advisers when they move; and that once clients are unlocked, firms become less willing to fire advisers for misconduct. Firms that unlock their clients subsequently experience higher levels of misconduct and increase their fees, calling into question whether clients are better off. (c) 2021 Elsevier B.V. All rights reserved.