Faculty of Economics and Business Administration Publications Database

Is Unbiased Financial Advice to Retail Investors Sufficient? Answers from a Large Field Study

Bhattacharya, Utpal
Kaesler, Simon
Loos, Benjamin
Meyer, Steffen
Volume: 24
Number: 4
Pages: 975 - 1032
Month: April
ISSN-Print: 0893-9454
Link External Source: Online Version
Year: 2012
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 approximately 8,000 active retail customers out of the brokerage''s several hundred thousand 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 do not improve their portfolio efficiency by much. Overall, our results imply that the mere availability of unbiased financial advice is a necessary but not sufficient condition for benefiting retail investors.