On the Origins of a Conflict of Interest in the Mutual Fund Industry
AbstractThis article discusses conflicts of interest existing between investors and their financial advisors. Several contributions in this field treated this question in relation either with invested amount or with expected holding period of the mutual fund. Our paper considers an approach globalizing these two parameters. The first part describes the organization of mutual fund fees in the US. Thanks to a numerical simulation, the second part emphasizes the conflict of interest focusing on the expected holding period. The third one analyses the changes of variables and their consequences on characteristics of investors concerned by this conflict of interest.
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Date of creation: 01 Feb 2011
Date of revision:
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OPCVM ; Conseiller financier ; Réglementation ; Conflit d'intérêt;
Other versions of this item:
- Sébastien M. Lemeunier, 2011. "On the origins of a Conflict of Interest in the Mutual Fund Industry," Post-Print, HAL hal-00592108, HAL.
- Lemeunier, Sébastien M., 2010. "On the origins of a Conflict of Interest in the Mutual Fund Industry," ESSEC Working Papers, ESSEC Research Center, ESSEC Business School WP1102, ESSEC Research Center, ESSEC Business School.
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
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- Alexander, Gordon J. & Jones, Jonathan D. & Nigro, Peter J., 1998. "Mutual fund shareholders: characteristics, investor knowledge, and sources of information," Financial Services Review, Elsevier, Elsevier, vol. 7(4), pages 301-316.
- Livingston, Miles & O'Neal, Edward S, 1998. "The Cost of Mutual Fund Distribution Fees," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 21(2), pages 205-18, Summer.
- Morey, Matthew R., 2003. "Should you carry the load? A comprehensive analysis of load and no-load mutual fund out-of-sample performance," Journal of Banking & Finance, Elsevier, Elsevier, vol. 27(7), pages 1245-1271, July.
- Guercio, Diane Del & Tkac, Paula A., 2002. "The Determinants of the Flow of Funds of Managed Portfolios: Mutual Funds vs. Pension Funds," Journal of Financial and Quantitative Analysis, Cambridge University Press, Cambridge University Press, vol. 37(04), pages 523-557, December.
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