Egan: Betterment tax impact previews reduced trade completion rates by 70%
Dan Egan · Dan Egan – Better Investment Outcomes (Capital Allocators, EP.23) · Aug 28, 2017 · at 13:44
Dan Egan, Director of Behavioral Finance at Betterment, discusses empirical split-test results from Betterment's Tax Impact Preview feature designed to mitigate impulsive investor allocation changes.
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“And what we found was that if we showed them a positive tax number, they were about 70% less likely to go through with a transaction. If you look at transactions that would have incurred 50 dollars or more in taxes, the completion rate was somewhere around eight percent. So you have above a 90% abandonment rate.”
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