Are financial advisors useful? Evidence from tax-motivated mutual fund flows
AbstractThis study shows that financial advisors provide useful tax advice to their clients, being the first to provide evidence of tangible benefits delivered by financial advisors in the U.S. We find that investors who purchase mutual fund shares through financial advisors exhibit a stronger tendency of avoiding taxable distributions than investors who buy shares directly. This differential is more pronounced for distributions that have large tax implications and are hard-to-predict. Furthermore, the differential gets stronger in December but only when investors face large capital losses, consistent with financial advisors helping the former investors engage in tax-loss selling. --
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Bibliographic InfoPaper provided by University of Cologne, Centre for Financial Research (CFR) in its series CFR Working Papers with number 12-09 [rev.].
Date of creation: 2013
Date of revision:
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More information through EDIRC
mutual funds; taxable fund distributions; financial advisors; after-tax returns;
Find related papers by JEL classification:
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ACC-2013-03-16 (Accounting & Auditing)
- NEP-ALL-2013-03-16 (All new papers)
- NEP-PBE-2013-03-16 (Public Economics)
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