Discussion paper

DP11859 Losing Trust in Money Doctors

Delegated stock market participation is fragile, especially during crises. Investors who had delegated all of their equity investments to fund managers before the financial crisis were almost twice as susceptible to exiting the stock market during the crisis than their peers who invested in individual stocks, other things equal. This result holds across two very different samples: 40,000 clients at a large German bank and the 2007-2009 panel of the U.S. Survey of Consumer Finances. Households who reported to rely on the advice of money doctors before the crisis, but not afterwards, were especially likely to sell all their stock funds.


Weber, M and D Dorn (2017), ‘DP11859 Losing Trust in Money Doctors‘, CEPR Discussion Paper No. 11859. CEPR Press, Paris & London. https://cepr.org/publications/dp11859