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Ethical dimensions of bank-distributed mutual funds

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  • Sandhu, Harsimran
  • Deb, Soumya Guha

Abstract

The study highlights that banks in India recommend mutual funds based on higher commissions rather than superior performance. We further show that bank recommendations and distributor commissions can both significantly influence the growth of fund assets-under-management (AUM).

Suggested Citation

  • Sandhu, Harsimran & Deb, Soumya Guha, 2024. "Ethical dimensions of bank-distributed mutual funds," Economics Letters, Elsevier, vol. 238(C).
    • Handle: RePEc:eee:ecolet:v:238:y:2024:i:c:s016517652400209x
    DOI: 10.1016/j.econlet.2024.111726
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    References listed on IDEAS

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    1. Beyer, Max & de Meza, David & Reyniers, Diane, 2013. "Do financial advisor commissions distort client choice?," Economics Letters, Elsevier, vol. 119(2), pages 117-119.
    2. Sane, Renuka & Halan, Monika, 2017. "Misled and mis-sold: financial misbehaviour in retail banks?," Journal of Comparative Economics, Elsevier, vol. 45(3), pages 429-444.
    3. Jeremy Burke & Angela A. Hung & Jack Clift & Steven Garber & Joanne K. Yoong, 2015. "Impacts of Conflicts of Interest in the Financial Services Industry," Working Papers WR-1076, RAND Corporation.
    4. Susan E. K. Christoffersen & Richard Evans & David K. Musto, 2013. "What Do Consumers’ Fund Flows Maximize? Evidence from Their Brokers’ Incentives," Journal of Finance, American Finance Association, vol. 68(1), pages 201-235, February.
    5. Guercio, Diane Del & Tkac, Paula A., 2008. "Star Power: The Effect of Monrningstar Ratings on Mutual Fund Flow," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 43(4), pages 907-936, December.
    6. Jeremy Burke & Angela Hung & Jack Clift & Steven Garber & Joanne K. Yoong, 2015. "Impacts of Conflicts of Interest in the Financial Services Industry," Working Papers 1076, RAND Corporation.
    7. Meyer, Steffen & Uhr, Charline & Loos, Benjamin & Hackethal, Andreas, 2023. "Switching from commissions on mutual funds to flat-fees: How are advisory clients affected?," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 423-449.
    8. Sertan Kabadayi, 2016. "Customers’ dissatisfaction with banking channels and their intention to leave banks: The moderating effect of trust and trusting beliefs," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 21(3), pages 194-208, September.
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