What renders financial advisors less treacherous? - On commissions and reciprocity -

Vera Popva ()
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Vera Popva: Max Planck Institute of Economics, Jena, Germany
Authors registered in the RePEc Author Service: Vera Angelova

No 2010-036, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: An advisor is supposed to recommend a financial product in the best interest of her client. However, the best product for the client may not always be the product yielding the highest commission (paid by product providers) to the advisor. Do advisors nevertheless provide truthful advice? If not, will a voluntary or obligatory payment by a client induce more truthful advice? According to the results, only the voluntary payment reduces the conflict of interest faced by advisors.

Keywords: financial advisors; moral hazard; reciprocity; experiments (search for similar items in EconPapers)
JEL-codes: C91 D03 D82 L15 M52 (search for similar items in EconPapers)
Date: 2010-06-23
New Economics Papers: this item is included in nep-cta and nep-fmk
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: What renders financial advisors less treacherous? On commissions and reciprocity (2016)
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