The Quality of Financial Advice: What Influences Client Recommendations?

Philippe d'Astous, Irina Gemmo and Pierre-Carl Michaud

No 30205, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper, we conduct an experiment with a large sample of financial planner professionals in Canada to elicit factors which may influence client recommendations. Using repeated client vignettes, we find that recommendations are often in-line with what one would expect from economic theory. In particular, advice is sensitive in expected ways to relative costs and benefits of particular options. In some domains, we find evidence that planners are more likely to recommend products they own themselves, their spouse owns, or they are licensed to sell. In the investment domain, we also find that planners are more likely to recommend products that clients inquire about even when this type of solicitation is randomized across clients and options. Finally, we find that planners are systematically sensitive to the gender of the client even when gender is uninformative regarding which recommendation to make.

JEL-codes: G51 G52 G53 (search for similar items in EconPapers)
Date: 2022-07
New Economics Papers: this item is included in nep-exp and nep-fle
Note: AG
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Working Paper: The Quality of Financial Advice: What Influences Client Recommendations? (2022)
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