Financial advisors: A case of babysitters?

► We use two data sets, one from a large brokerage and another from a major bank. ► We ask how advised accounts perform relative to self-managed accounts. ► Advised accounts offer lower net returns and inferior risk-return tradeoffs. ► Trading costs contribute to outcomes, as advised accounts feature higher turnover. ► Results apply with stronger force to bank advisors than to independent advisors.