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

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.