In an undercover audit of Boston-area financial advisors, three economists wanted to find out if financial advisors undo or reinforce the behavioral biases and misconceptions of their clients. “We document that advisors fail to ‘de-bias’ their clients and often reinforce biases that are in their interests,” the authors found. Sponsored by the National Bureau of Economic Research, Harvard economist Sendhil Mullainathan, Markus Noeth of the University of Hamburg and Antoinette Schoar of the MIT Sloan School of Management hired actors to pose as clients and display self-defeating investment behavior. The study focused on retail advisors at the lower end of the wealth spectrum and did not include private wealth managers or hedge funds. The specific firms and advisors were not named.
Most Advisors Caught Failing Clients in Research ‘Sting’ (AdvisorOne)
Comments
Special Features
2013 Outlook As we move into a transition year, check out LifeHealthPro's conjectures for the life, annuities, health and disability markets.
100 Best Sales & Marketing Ideas Whether you want ideas for referrals, generating leads or just listening to your clients better, we have the sales and marketing tips you need.
The Complete ELNY Saga For more than two decades, the Executive Life Insurance Company of New York (ELNY) has been bled for billions of dollars while languishing in a state-imposed purgatory.
Life Insurance A-Z This alphabetical-themed infographic will help your clients feel more comfortable discussing life insurance protection concepts.
2012 Advisor of the Year Through a very thorough nomination process we look to find a top producer who is a true cornerstone of a community.
Senior Survey 2011 In this special section, find out how seniors build their nest egg, make an estate plan, finance their health care and where they live.
