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Is Unbiased Financial Advice to Retail Investors Sufficient? Answers from a Large Field StudyUtpal BhattacharyaIndiana University Bloomington - Department of Finance Andreas HackethalGoethe University Frankfurt - Department of Finance Simon KaeslerGoethe University Frankfurt - Department of Finance Benjamin LoosGoethe University Frankfurt - Department of Finance Steffen MeyerGoethe University Frankfurt - Department of Finance September 23, 2011 Review of Financial Studies, Forthcoming Abstract: Working with one of the largest brokerages in Germany, we record what happens when unbiased investment advice is offered to a random set of roughly 8,000 of the brokerage’s several hundred thousand active retail customers. We find that investors who most need the financial advice are least likely to obtain it. The investors who do obtain the advice (about 5%), however, hardly follow the advice, and so do not improve their portfolio efficiency much. Overall, our results imply that the mere availability of unbiased financial advice is a necessary but not sufficient condition for benefiting retail investors.
Number of Pages in PDF File: 70 Keywords: retail investors, brokers, financial advice, efficient portfolios JEL Classification: D14, G11, G24, G28 Accepted Paper SeriesDate posted: September 24, 2011Suggested CitationContact Information
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