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How does the salience and structure of costs for financial advice influence consumer demand? This study conducts a randomized choice experiment exploring possible consequences of introducing a commission ban in the retail mortgage market. A sample of more than 2,100 participants of the Dutch Household Survey panel reveals that in a fee-based regime, in which the costs of advice are salient and must be paid upfront, demand for advice decreases by 25 percent compared with a situation in which the same costs are embedded in mortgage payments. We do not find evidence that such demand effects for financial advice varies across less versus more sophisticated customers. At the same time, we do find that customers with a stronger focus on the present express less willingness to pay for advice upfront.
Bruin et al. (Tue,) studied this question.