Assessing the Costs and Benefits of Brokers in the Mutual Fund Industry

Bergstresser, Daniel; Chalmers, John; Tufano, Peter

doi:10.1093/rfs/hhp022

Cited by 458 publications

(99 citation statements)

References 22 publications

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“…We reach similar conclusions when we use fund marketing fees (MKTING) in models (xvii)-(xx). The negative relationship between non-advisory fees (either 12B-1 or MKTING) and gross performance is also consistent with Bergstresser, Chalmers, and Tufano (2009). They show that broker-sold mutual funds perform worse and charge significantly higher marketing fees than direct-sold mutual funds.…”

Section: G the Relationship Between Fees And Before-fee Performancesupporting

confidence: 72%

The Impact of Idiosyncratic Risk on Mutual Fund Fees

Casavecchia

Hulley

2013

SSRN Journal

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Section: G the Relationship Between Fees And Before-fee Performancesupporting

confidence: 72%

The Impact of Idiosyncratic Risk on Mutual Fund Fees

Casavecchia

Hulley

2013

SSRN Journal

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“…by shifting a portion of the sales loads to annual kick back payments. Some researchers have started to assess the value added by brokers in the mutual fund industry (see Bergstresser et al (2006)), but further clarification is needed.…”

Section: Financial Literacy Bta and The Decision To Select An Activementioning

confidence: 99%

Financial Literacy and Mutual Fund Investments: Who Buys Actively Managed Funds?

Müller

Weber

2010

Schmalenbach Bus Rev

112

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Using data from an online survey with more than 3,000 mutual fund customers we construct a financial literacy score based on quiz-like statements. Our objective measure of financial literacy is significantly correlated with several socioeconomic and demographic variables. We also document a positive correlation between financial literacy and better than average (BTA) thinking in terms of investment skills. With respect to mutual fund investments, there is mixed evidence on the influence of financial literacy. While more sophisticated participants pay lower front-end loads, are less biased in their past return estimates and less miscalibrated in their return forecasts for their own fund as well as for the whole stock market, no relationship exists between financial literacy and ongoing fund expenses. Moreover, financial literacy has only a slight impact on the decision to buy a passive fund rather than an actively managed fund. Our results indicate that the lack of financial literacy among most mutual fund customers cannot completely explain the growth in actively managed funds over the past. The higher level of BTA among more sophisticated investors is modestly responsible for this finding.

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“…This may for instance re ‡ect her concerns about reputational losses following unsuitable sales. 7 In Section 7.1 we show more carefully how these externalities might result from the advisor's sales commissions, and her reputational and career concerns. Of course, when = 0, the advisor's utility is separable across clients, and there is no di¤erence between exclusive and non-exclusive …nancial advice.…”

Section: The Baseline Modelmentioning

confidence: 99%

“…6 An analogous approach is followed in Stocken (2003). 7 Gennaioli et al (2013), for instance, argue that money mangers are particularly sensitive to their reputation. In our model we are implicitly assuming that reputation may be crucially a¤ected by the size of an advisor's clientele via network e¤ects that may arise from (un-modeled) information spillovers between clients.…”

Section: The Baseline Modelmentioning

confidence: 99%

Non-Exclusive Financial Advice

2015

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We propose a simple model of non-exclusive …nancial advice in which two households rely on a self-interested (common) expert to make their investment choices. There is only one source of risk, and the expert is privately informed about the risky asset's volatility. When monetary transfers are unenforceable, we show that investors may delegate their investment decisions to the expert. When doing so, however, they impose restrictions on her choices which crucially depend on whether the expert perceives investors'asset allocations as complements or as substitutes. Finally, we analyze the implications of non-exclusivity in …nancial advice on investment behavior and welfare, and highlight a set of novel testable implications.

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Assessing the Costs and Benefits of Brokers in the Mutual Fund Industry

Cited by 458 publications

References 22 publications

The Impact of Idiosyncratic Risk on Mutual Fund Fees

The Impact of Idiosyncratic Risk on Mutual Fund Fees

Financial Literacy and Mutual Fund Investments: Who Buys Actively Managed Funds?

Non-Exclusive Financial Advice

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