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It is well known that distribution channels have an impact on financial product performance, notably fund performance. Funds distributed through more intermediaries perform less. Basically, if funds are sold directly to investors they face more incentives to perform than if they are sold through brokers. In the same vein, a recent paper by Egan (2019), analyses how brokers might bias the investments of retail investors in structured products.
The author studies the market for equity reverse convertible bonds. A reverse convertible bond is equivalent to a standard coupon paying bond with the exception that the final principal payment of reverse convertibles can be converted into shares of a pre-specified reference equity. The reference equity should be different from...
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