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- Title
Financial Advice.
- Authors
Inderst, Roman; Ottaviani, Marco
- Abstract
Financial advice could play an essential role in well-functioning markets for retail financial products, given that many consumers find it difficult to evaluate the complex products on offer. However, conflicts of interest, which are pervasive in some parts of the industry, can turn advice into a curse rather than a blessing for consumers, especially when consumers are not sufficiently wary. Through a simple model of financial advice, we overview the pros and cons of various policy interventions, such as imposing mandatory disclosure, banning commissions, and regulating contract cancellation terms. (JEL D14, D18, G21, G28)
- Subjects
UNITED Kingdom; CONSUMERS; FINANCE; FINANCIAL markets; GOVERNMENT policy; FINANCIAL disclosure; GOVERNMENT agencies; FINANCIAL Services Authority (Great Britain); FINANCIAL Conduct Authority (Great Britain); ECONOMICS
- Publication
Journal of Economic Literature, 2012, Vol 50, Issue 2, p494
- ISSN
0022-0515
- Publication type
Article
- DOI
10.1257/jel.50.2.494