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Title:Are financial advisors useful? Evidence from tax-motivated mutual fund flows
Authors:Cici, Gjergji
Kempf, Alexander
Sorhage, Christoph
Issue Date:2012
Series/Report no.:CFR Working Paper 12-09
Abstract:This 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.
Subjects:mutual funds
taxable fund distributions
financial advisors
after-tax returns
JEL:G11
G24
H24
Is replaced by the following version:http://hdl.handle.net/10419/70484
Document Type:Working Paper
Appears in Collections:CFR Working Papers, Centre for Financial Research (CFR), Universität Köln

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