The Happiness Professor

An unprecedented number of investors give their financial advisors a mandate for socially responsible investing (SRI). Yet, the impact of SRI mandates on consumers is unclear. In a pre-registered lab-in-the-field experiment with 345 professional advisors, the authors find that advisors charge a premium to SRI clients that cannot be justified by higher effort, skill, or costs.

This suggests that advisors exploit the SRI preferences of their clients (who accept these higher fees). In an independent survey, financial regulators predict higher SRI fees but do not predict exploitation. Regulators confirm that the findings require attention from policymakers.

Reference: Marten Laudi, Paul Smeets and Utz Weitzel, Do Financial Advisors Exploit Responsible Investment Preferences? (July 16, 2021). Available at SSRN: SSRN: https://ssrn.com/abstract=3887716 or http://dx.doi.org/10.2139/ssrn.3887716

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In opdracht van Prof. Paul Smeets
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