Do seemingly smarter people get better advice?


Bucher-Koenen, Tabea ; Hackethal, Andreas ; Koenen, Johannes ; Laudenbach, Christine


DOI: https://doi.org/10.2139/ssrn.2572961
URL: https://ssrn.com/abstract=2572961
Document Type: Working paper
Year of publication: 2019
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
Business School > Finanzmärkte (Bucher-Koenen 2019-)
Subject: 300 Social sciences, sociology, anthropology
330 Economics
Abstract: In this paper, we study the interaction between financial advisors and customers with a potential conflict of interest. We show in a simple analytical framework that advisors have an incentive to provide better advice to consumers who appear to be better informed. From this, we derive an identification strategy to infer the quality of advice received from variables observed in a representative survey of German consumers. Our identification strategy makes use of the fact that we observe both a generally observable signal of a customer's financial literacy as well as an objective measure, which is not observed by the advisor. We apply this strategy to three different empirical settings. In each of these settings, we find consistent evidence that consumers with worse signals of financial literacy on average receive worse financial advice. In particular, both women and individuals without tertiary education are negatively affected.

Dieser Eintrag ist Teil der Universitätsbibliographie.




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Bucher-Koenen, Tabea ; Hackethal, Andreas ; Koenen, Johannes ; Laudenbach, Christine (2019) Do seemingly smarter people get better advice? Mannheim [Working paper]


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