Financial Advice and Bank Profits

@inproceedings{Hoechle2018FinancialAA,
  title={Financial Advice and Bank Profits},
  author={Daniel Hoechle and Stefan Ruenzi and Nic Schaub and Markus Schmid},
  year={2018}
}
We use a unique data set from a large retail bank containing internal managerial Accounting data on revenues and costs per client to analyze how banks and their financial advisors generate profits with customers. We find that advised transactions are associated with higher profits than independently executed trades of the same client. The bank’s own mutual funds and structured products are most profitable for the bank, and profits increase with trade size. We show that advisors recommend… CONTINUE READING

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