Retail Financial Advice: Does One Size Fit All?

• 成果类型: Article
• 署名作者: Foerster, Stephen; Linnainmaa, Juhani T.; Melzer, Brian T.; Previtero, Alessandro
• 署名单位: Western University (University of Western Ontario); University of Southern California; National Bureau of Economic Research; Northwestern University; Indiana University System; Indiana University Bloomington
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12514
• 发表日期: 2017
• 页码: 1441-1482
• 关键词: lifetime portfolio selection; stock-market; BROKERS; CHOICE; RISK

摘要

Using unique data on Canadian households, we show that financial advisors exert substantial influence over their clients' asset allocation, but provide limited customization. Advisor fixed effects explain considerably more variation in portfolio risk and home bias than a broad set of investor attributes that includes risk tolerance, age, investment horizon, and financial sophistication. Advisor effects remain important even when controlling flexibly for unobserved heterogeneity through investor fixed effects. An advisor's own asset allocation strongly predicts the allocations chosen on clients' behalf. This one-size-fits-all advice does not come cheap: advised portfolios cost 2.5% per year, or 1.5% more than life cycle funds.