Don't move my cheese: Financial advice adaptation to regulatory change

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This paper examines the impact of financial advisors on retail investor behavior in response to an Israeli regulation converting ETNs to ETFs. Our findings demonstrate that transactions influenced by financial advisors shifted from ETNs to index funds following the reform, while unadvised market participants’ tendencies did not change. This shift is attributed to the reform's cancellation of matched transactions, which changed the work routine for financial advisors. The results demonstrate that to be effectively implemented, financial reforms should consider their effect on market participants’ workflows.

Original languageEnglish
Article number105005
JournalFinance Research Letters
StatePublished - Mar 2024

Bibliographical note

Publisher Copyright:
© 2024 Elsevier Inc.


We thank the Israel Securities Authority for providing the data. The paper is the opinion of the authors only and does not represent the views of the Israel Securities Authority. The paper was presented at the 2023 special-theme conference on The Effectiveness of Financial Regulation hosted by the School of Economics at the College of Management Academic Studies, Israel. We thank Beni Lauterbach, Gady Jacoby, and the participants of the Effectiveness of Financial Regulation conference for their helpful comments and suggestions.

FundersFunder number
Israel Securities Authority


    • Financial advisors
    • Financial reform
    • Investor behavior
    • Regulation
    • Retail investors


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