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Why choosing dominated personal pension plans: sales force and financial literacy effects

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  • Giuseppe Marotta

Abstract

We investigate the puzzle of choices of dominated personal pension instruments in Italy, with insurers’ products (PIPs) much more subscribed than shares of open pension funds offered by banks (FPAs). We find evidence, using the three waves of Bank of Italy’s Survey of Household Income and Wealth (SHIW) between 2010 and 2014, of a sales force effect deriving from a network of post offices and independent financial advisors associated with insurance companies much more widespread than bank branches. We document that financial literacy has a significant dampening effect on the supply push factor only for PIPs, and especially for the subset with voluntary matching employers’ contributions. The effect is detected mostly in the 2014 SHIW wave, the one fully affected by the implementation of the pension system reform legislated in December 2011.

Suggested Citation

  • Giuseppe Marotta, 2018. "Why choosing dominated personal pension plans: sales force and financial literacy effects," Centro Studi di Banca e Finanza (CEFIN) (Center for Studies in Banking and Finance) 0072, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    • Handle: RePEc:mod:wcefin:0072
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    More about this item

    Keywords

    Pension system reform; Financial literacy; Retail financial products distribution; Italy;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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