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Why choosing dominated personal pension plans: sales force and financial literacy effects

Giuseppe Marotta ()

Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) from Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi"

Abstract: We investigate the puzzle of choices of dominated personal pension instruments in Italy, with insurers’ products (PIPs) much more subscribed than shares of open pension funds offered by banks (FPAs). We find evidence, using the three waves of Bank of Italy’s Survey of Household Income and Wealth (SHIW) between 2010 and 2014, of a sales force effect deriving from a network of post offices and independent financial advisors associated with insurance companies much more widespread than bank branches. We document that financial literacy has a significant dampening effect on the supply push factor only for PIPs, and especially for the subset with voluntary matching employers’ contributions. The effect is detected mostly in the 2014 SHIW wave, the one fully affected by the implementation of the pension system reform legislated in December 2011.

Keywords: Pension system reform; Financial literacy; Retail financial products distribution; Italy (search for similar items in EconPapers)
JEL-codes: D91 E21 G11 H55 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-eur, nep-fle and nep-mac
Date: 2018-07
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Persistent link: https://EconPapers.repec.org/RePEc:mod:wcefin:0072

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