Starjournal Quotation Stoughton, Neal, Wu, Youchang , Zechner, Josef. 2011. Intermediated Investment Management. Journal of Finance 66 (3): S. 947-980.




Intermediaries such as financial advisers serve as an interface between portfolio managers and investors. A large fraction of their compensation is often provided through kickbacks from the portfolio manager. We provide an explanation for the widespread use of intermediaries and kickbacks. Depending on the degree of investor sophistication, kickbacks are used either for price discrimination or aggressive marketing. We explore the effects of these arrangements on fund size, flows, performance, and investor welfare. Kickbacks allow higher management fees to be charged, thereby lowering net returns. Competition among active portfolio managers reduces kickbacks and increases the independence of advisory services.


Press 'enter' for creating the tag

Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Finance
Citation Index SSCI
WU Journalrating 2009 A+
Starjournal Y
Language English
Title Intermediated Investment Management
Volume 66
Number 3
Year 2011
Page from 947
Page to 980


Zechner, Josef (Details)
Stoughton, Neal (University of New South Wales, Australia)
Wu, Youchang (University of Wisconsin-Madison, United States/USA)
Institute for Finance, Banking and Insurance IN (Details)
Google Scholar: Search