Attracting Flows by Attracting Big Clients

44 Pages Posted: 14 Nov 2008 Last revised: 19 Apr 2016

See all articles by Lauren Cohen

Lauren Cohen

Harvard Business School; National Bureau of Economic Research (NBER)

Breno Schmidt

Emory University - Goizueta Business School

Date Written: November 1, 2008


We explore a new channel for attracting inflows using a unique dataset of corporate 401(k) retirement plans and their mutual fund family trustees. Families secure substantial inflows by being named trustee. We find that family trustees significantly overweight, and are reluctant to sell, their 401(k) client firm's stock. Trustee overweighting is more pronounced when the relationship is more valuable to the trustee family, and it is concentrated in those funds receiving the greatest benefit from the inflows. We quantify this flow benefit and find that inclusion in the 401(k) plan has an economically and statistically large, positive effect on inflows.

The appendix to this paper may be found :

Keywords: Portfolio Choice, Mutual Funds, Overweight, Fund Flows

JEL Classification: G11, G23, J26

Suggested Citation

Cohen, Lauren and Schmidt, Breno, Attracting Flows by Attracting Big Clients (November 1, 2008). Journal of Finance, Forthcoming. Available at SSRN:

Lauren Cohen

Harvard Business School ( email )

Rock Center 321
Soldiers Field
Boston, MA 02163
United States


National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Breno Schmidt (Contact Author)

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

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