When financial advice rocks the market

Conrado Cuevas, Dan Bernhardt

Research output: Contribution to journalArticlepeer-review


We document the impact of recommendations by a hugely influential Chilean pension advisor, H&L, on pension investments by individuals, domestic stock market outcomes, and pension fund manager investment strategies. Following H&L's retirement portfolio recommendations, pension investors shifted amounts that, in a week, often exceeded 100% of monthly domestic stock trading volume. The market believed the recommendations—domestic stock prices responded, but they did so without trade: the massive portfolio shifts did not generate abnormally-high trading volume. To accommodate H&L's impact, pension managers adjusted portfolio compositions, making them more similar, and shifted holdings of liquid assets rather than domestic stocks.

Original languageEnglish (US)
Article number101051
JournalEmerging Markets Review
StatePublished - Sep 2023
Externally publishedYes


  • Announcement effect
  • Financial advice
  • Institutional investors
  • Liquidity management
  • Public information
  • Trading volume

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics


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