The Effect of Advisors' Incentives on Clients' Investments

• 成果类型: Article
• 署名作者: Battiston, Diego; Blanes I Vidal, Jordi; Hortala-Vallve, Rafael; Lou, Dong
• 署名单位: University of Edinburgh; University of London; London School Economics & Political Science; Centre for Economic Policy Research - UK; Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082; 1540-6261
• DOI: 10.1111/jofi.70041
• 发表日期: 2026-06
• 关键词: financial literacy; BROKERS; advice

摘要

We use granular data from an investment firm and a credible identification strategy to estimate the effect of financial advisors' incentives on client investments. Exploiting a natural experiment triggered by the 2018 implementation of Markets in Financial Instruments Directive II (MiFID II), we find that clients' investments respond strongly to changes in advisor incentives. Advisors react through multiple mechanisms: (i) inducing existing clients to bring in new money, (ii) channeling it to high-incentive funds, and (iii) attracting more new clients. We also find that the MiFID II reform generated more balanced incentives, which translated into higher portfolio efficiency through lower average fees and stronger portfolio diversification.