Review of Finance 2026

Financial advice and retirement savings

Daniel Hoechle¹; Stefan Ruenzi²; Nic Schaub³; Markus Schmid⁴

¹ University of Applied Sciences and Arts Northwestern Switzerland Institute for Finance, , Basel, CH-4002, · ² University of Mannheim Finance Area, , Mannheim, D-68131, · ³ WHU – Otto Beisheim School of Management , Vallendar, D-56179, · ⁴ University of St. Gallen Swiss Finance Institute (SFI) and Swiss Institute of Banking and Finance, , St. Gallen, CH-9000,

Abstract

We study the impact of financial advice on retirement savings. We document that advisors help clients to prepare for retirement by inducing them to take advantage of tax incentives offered on retirement accounts. Advisors particularly promote retirement funds as compared to savings accounts. After-tax returns of advisor-induced retirement fund investments exceed returns of plausible alternative investments. We find no indication that advisor-induced contributions to retirement accounts lead to negative side effects, such as reductions in other savings or liquidity constraints. Hence, we provide evidence of a bright side of financial advice. Furthermore, investments in retirement funds increase bank profits, pointing toward a win–win situation with rent-sharing between the bank and its clients. However, advisors do not in particular target clients that are at a higher risk of under-saving for retirement, such as female clients, clients with lower wealth, and less-educated clients.

DOI

10.1093/rof/rfag007

Language

en

Sources

openalex crossref

Cite

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