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Alumni

Research and Teaching Assistants

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Photo: Stolper

Dr. Lukas Brenner

Dr. Lukas Brenner had joined the Behavioral Finance Research Group as an external research assistant in January 2018 and finished his doctoral studies in March 2020. After studying business administration with a major in finance at Reutlingen University of Applied Sciences (ESB) and Purdue University in Indiana, he has been working for the strategy consultancy Bain & Company since October 2015, advising companies in the industrial, banking and insurance sector as well as private equity companies.

  • Inhalt ausklappen Inhalt einklappen ResearchResearch

    How do external influences, which do not emanate directly from the household itself, change the investment decisions and financial behaviour of private households?

    In his cumulative dissertation, Dr. Lukas Brenner examines the effect of various aspects and factors on the investment behavior of private households. The focus of the research is on factors that are usually not actively influenced by the object of study (the private household). In particular, the essays examine influences that come from (i) family and friends (direct social environment), (ii) the consequences of fraud, and (iii) financial advisors.

    What influence do financial contributions from family and friends have on the investment behaviour of private households?

    Two studies conducted as part of the research programme deal with the topic of how financial contributions from family and friends influence the investment behaviour of private households. The first study examines how households that inherit or receive gifts deal with the transferred assets. How does such an inflow influence the financial decisions of households - especially with regard to saving for private retirement provision? Our findings suggest that heirs use some of the money they receive to increase their private pension provision, but there are significant differences between heir households. "Many households will come across the issue of inheritance over time. In Germany in particular, it will be interesting to see whether and how this inflow of funds influences citizens in their financial investment decisions - for example on the capital market or for old-age provision. It will be important for legislators, as well as for financial institutions, to correctly anticipate the financial decisions of thousands of affected households and to set the appropriate course". The second study addresses the issue of how (promised) financial support from the closest social circles influences the investment behaviour of private households. For example, do households that can rely on a social safety net from friends and family take a higher risk on the capital market? Building on current findings in the emerging field of social finance, the study suggests a link between such promised financial support and investment in high-risk asset classes.

    What influence do negative experiences such as (consumer) fraud have on the financial well-being of private households?

    This question is investigated in the study "Consumer Fraud Victimization and Financial Well-Being" in cooperation with Dr. Tobias Meyll (University of Gießen), Prof. Dr. Andreas Walter (University of Gießen) and Prof. Dr. Oscar Stolper. In the context of the financial situation of private households, the study deals with the far-reaching negative consequences of fraud on consumers. How does financial well-being change after an individual has become a victim of fraud? To what extent do the consequences go beyond the purely monetary loss and through what channels does such a negative event have an impact? Our empirical research operates at the interface between household finance, psychology and criminology. Our results suggest that fraud has a significant negative impact on the "financial self-confidence" of victims and therefore has serious, undesirable consequences for (future) financial decisions of individuals.

    The study Consumer Fraud Victimization and Financial Well-Being (Brenner, Meyll, Stolper & Walter, 2020) documents the project and is published in Journal of Economic Psychology (76).

    Do financial advisors influence the risk profile of private clients?

    In collaboration with Prof. Dr. Oscar Stolper, this project investigates the influence of financial advisors on the investment behavior of private households. The central pillar of investment recommendations in standardized financial consulting is the process for the objective derivation of an investor's risk-bearing capacity profile by the financial consultant. This profile should be independent of the advisor and should be derived individually according to the life situation / asset situation as well as preferences and inclinations of the investor. However, findings of the study indicate that financial advisors (strongly) influence the risk profile of investors in the process. As a consequence, this leads to distorted product and investment recommendations by the advisor with far-reaching negative consequences for the investor.

    Furthermore, Lukas Brenner has conducted research together with Dr. Tobias Meyll on the influence of Robo-Advisors. In the study "Robo-advisors: A substitute for human financial advice?" they investigate the connection between Robo-Advisor and the demand for personal customer advice. Findings of the study suggest that Robo-Advisors are considered a valid substitute for personal financial advice.

    The study Robo-advisors: A substitute for human financial advice? (Brenner, Meyll, 2020) documents the project and is published in Journal of Behavioral and Experimental Finance (25).

  • Inhalt ausklappen Inhalt einklappen PublicationsPublications

    Brenner, L./Stolper, O. (2020): Mind the gap: inheritance and inequality in retirement wealth, in: Intergenerational Justice Review 6(2), 63-72. Winner of the 2020 Intergenerational Justice Prize

    Brenner L./Meyll T. (2020): Robo-Advisors: A Substitute for Human Financial Advice?.

    Brenner L./Meyll T./Stolper O./Walter A. (2020): Consumer Fraud Victimization and Financial Well-Being.

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Photo: Stolper

 Dr. Dominik Scheld

Dominik Scheld has been with the Behavioral Finance Research Group as an external research assistant since June 2018 and, since May 2020, has been working as a research and teaching assistant as part of the project "Mutual fund information disclosure: regulatory compliance, signaling, and investor response" sponsored by the Fritz Thyssen Foundation until August 2020. He holds a bachelor’s degree in Business Administration with a specialization in Finance from the Goethe University Frankfurt and a master’s degree earned at the University of Mannheim and the Università Commerciale Luigi Bocconi (Milan). He has advised corporates, banks, and insurance companies as a management consultant at Bain & Company since October 2015.

  • Inhalt ausklappen Inhalt einklappen ResearchResearch

    Within the project "Mutual fund information disclosure: regulatory compliance, signaling, and investor response" sponsored by the Fritz Thyssen Foundation, the effectiveness of product information disclosure for mutual funds is investigated. The research project is divided into three independent studies. Specifically, we examine i) whether product information is comprehensible to the private investor, ii) how local disclosure interventions affect supply and demand side in the industry, and iii) how strategic "signaling" of mutual fund managers affects private investors’ asset allocation.

    Is mutual fund product information comprehensible for the average investor?

    With the introduction of short-form key investor information documents (KIIDs) for mutual funds in 2012, the European financial regulation underlines the importance of using simple and easy to understand language in financial product information disclosure. The objective is to provide private investors with easier and more transparent access to product information. We evaluate whether these documents and the accompanying "plain language guidelines" affect the readability of product information for mutual funds. Applying textual analytics on a large-scale sample of all mutual funds registered for sale in Germany, we are the first to quantitatively benchmark the readability of product information for retail investors on a large scale. While fund information qualifies as very difficult to read requiring up to 15 years of education, we find that readability improved following recent disclosure regulations. Improvements are driven by simpler syntax and writing style. Still, we identify an increase in use of jargon and non-compliance with mandatory design requirements. We discuss our results and propose potential disclosure improvements.

    How do local disclosure interventions on funds’ "activeness" affect investors and fund providers?

    The performance and costs of a fund should be transparent to investors. While costs of an mutual funds need to be transparently disclosed ever since, performance is only published in the form of achieved returns, which, according to existing literature, does not necessarily provide indications on future fund performance. Especially for investors in actively managed funds, it is of immanent interest whether the fund management has historically tried to "actively" beat the market. As of April 2018, several of the largest U.S. mutual fund firms have been imposed to disclose a measure of fund manager activeness to retail investors. We evaluate investors’ reaction and the supply-side response to this intervention. We find that investors are not rationally trading on this new information, but are rather subject to a media attention effect. Moreover, we observe that the intervention did neither affect suppliers in its intended way. Even for those funds with a large overlap of holdings with the benchmark, no measurable effort to increase management activeness can be observed subsequent to the imposed disclosure. We discuss our results and propose potential disclosure improvements.

    How does strategic "signaling" of mutual fund managers affect private investors’ asset allocation?

    "Skin-in-the-Game" (SitG), indicating a fund manager’s private investment in her own funds, allows to align interests of fund managers and investors. Since 2005, US fund managers have been obliged to disclose their shares in self-managed funds. However, the information can be considered inaccessible to private investors, as it is neither standardized nor transparently disclosed to them. We use a different, yet more salient channel through which SitG is often signaled: the funds’ letter to the shareholders (LS). Although LS usually do not allow to infer the exact investment of the manager to, they do provide a verbal indication of whether personal shares are held by the fund management. Using textual analysis on a large sample (~16,000 observations) of mutual funds’, we are the first to show that investors trade on the verbal commitment of fund managers in the LS. We find significant inflows of funds by private investors in direct connection with the publication of LS that communicate SitG verbally. In contrast, investors do not react on the actual amount invested by portfolio as required to be disclosed by the SEC. Our findings highlight the increasing need for regulators to focus on not only content, but also the format of disclosure requirements.

    Furthermore, Dominik Scheld was involved in two research projects to answer the questions "What is the effect of narcissism in fund management?" and "What character traits shape fund managers?" (for further information check the research section by Anna-Lena Bauer).

Student Assistants

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 Alexander Becker

Alexander Becker has been working as student assistant since December 2018 until December 2020 After receiving his bachelor’s degree from the University of Bayreuth, he started studying the Master of Business Administration at the Philipps-University Marburg in October 2018.

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Jasmin Petersohn

Jasmin Petersohn has been working as student assistant since November 2019 until February 2020. She finished her master's degree in Business Administration at Philipps-University in Marburg in September 2020.