How Important Is Affiliation Between Mutual Funds and Distributors for Fund Flows?

Bjarne Florentsen, Ulf Nielsson, Peter Raahauge, Jesper Rangvid*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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We quantify the importance to mutual fund flows of affiliation between funds and their distributors. Bank failures create exogenous variation in retail customers’ exposure to bank-affiliated mutual funds. When a bank fails, its customers are moved to other banks that distribute their own affiliated mutual funds. Following such exogeneous bank shifts, customers sell their fund holdings and replace them with funds affiliated with their new banks. Customers react sequentially over time. After four years, a third of customers’ investments have been reallocated. In spite of large reallocations, investors do not end up with better-performing fund portfolios.
Original languageEnglish
Article numberrfab035
JournalReview of Finance
Issue number4
Pages (from-to)971-1009
Number of pages39
Publication statusPublished - Jul 2022

Bibliographical note

Published online: 20 December 2021.


  • Mutual funds
  • Retail investors
  • Fund flows
  • Distribution channel

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