Assessing the Costs and Benefits of Brokers in the Mutual Fund Industry

  title={Assessing the Costs and Benefits of Brokers in the Mutual Fund Industry},
  author={Daniel Bergstresser},
Many investors purchase mutual funds through intermediated channels, paying brokers or financial advisors for fund selection and advice. This article attempts to quantify the benefits that investors enjoy in exchange for the costs of these services. We study broker-sold and direct-sold funds from 1996 to 2004, and fail to find that brokers deliver substantial tangible benefits. Relative to direct-sold funds, broker-sold funds deliver lower risk-adjusted returns, even before subtracting… CONTINUE READING
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