Advising the Advisors: Evidence from ETFs

Author: Jonathan Brogaard, Nataliya Gerasimova, Ying Liu

Asset managers play a dual role by simultaneously managing funds and increasingly providing investment model recommendations to third-party financial advisors. Using a novel data set focusing on recommendations by ETF issuers and strategists, we discover that these recommendations have a substantial impact on ETF flows. Model providers recommend their affiliated ETFs more frequently, and these tend to have higher fees and lower performance than recommended unaffiliated ETFs. In addition, investors who follow the recommendations exhibit weaker sensitivity to funds’ prices and returns. We fail to find evidence that recommendations are driven by private information about the future outperformance of affiliated funds.

Brogaard, Jonathan and Gerasimova, Nataliya and Liu, Ying, Advising the Advisors: Evidence from ETFs (November 27, 2021). Available at SSRN: or

How can tebi help you?