Property Rights to Client Relationships and Financial Advisor Incentives

• 成果类型: Article
• 署名作者: Clifford, Christopher P.; Gerken, William C.
• 署名单位: University of Kentucky
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13058
• 发表日期: 2021
• 页码: 2409-2445
• 关键词: asset ownership; governance; benefits; BROKERS; advice; COSTS

摘要

We study the effect of a change in property rights on employee behavior in the financial advice industry. Our identification comes from staggered firm-level entry into the Protocol for Broker Recruiting, which waived nonsolicitation clauses for advisor transitions among member firms, effectively transferring ownership of client relationships from the firm to the advisor. After the shock, advisors appear to tend to client relationships more by investing in client-facing industry licenses, shifting to fee-based advising, and reducing customer complaints. Our findings support property rights based investment theories of the firm and document offsetting costs to restricting labor mobility.