Non-Exclusive Financial Advice

Salvatore Piccolo (), Giovanni Puopolo and Luis Vasconcelos ()

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: 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.

Keywords: Delegated Portfolio Management; Financial Advice; Non-Exclusivity (search for similar items in EconPapers)
JEL-codes: G11 G23 (search for similar items in EconPapers)
Date: 2013-12-10, Revised 2015-10-13
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (1)

Published in Review of Finance, 20, 6, pp. 2079-2123.

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Related works:
Journal Article: Non-Exclusive Financial Advice (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:347

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