Youchang Wu from the University of Vienna is giving a VGSF research seminar
on "Intermediated Investment Management" on FRIDAY, Nov. 24th, from 15:30 to
17:00 at the WU Wien (Seminarraum D204, UZA 4, Nordbergstrasse 15, 1090
Wien, see
http://www.wu-wien.ac.at/portal/ueber_wu/standorte/lageplan4 for a detailed
plan). Please find the paper's abstract below.
Best,
Michael Halling
Abstract
Investment advisers perform the role of assisting clients with their
investments and distributing portfolio management services. While the vast
majority of clients employ advisory services, an important issue is how well
advisers perform in this capacity. Our theoretical model analyzes the
impacts on portfolio performance, fund flows, fund sizes and welfare from
the use of advisers. An important aspect of our analysis is the extent to
which conflicts of interest such as influence activity can bias the asset
allocation decisions of advisers. Interestingly advisory services are
utilized to a greater extent under this circumstance. We show that
investment advisers help to improve social welfare, but much of the welfare
gain is extracted by the portfolio manager. When influence activity is
feasible, investors welfare is adversely affected by the presence of
advisers.