Poor planning: Investors who save regularly save less overall

Scheduling regular deposits is consensus popular financial advice, but does doing so actually increase savings? Perhaps not. In a dataset of 32,602 robo-advisor clients who saved an average of €19,962, investors who scheduled deposits saved 30.0% (€7385) less than investors who did not schedule deposits, and still 15.8% (€3147) less ceteris paribus . Schedulers did not save significantly more during years in which they did schedule deposits as long as they continued to save sporadically. Monthly savers’ lower savings rates represent an opportunity cost of 10% of assets under management, around €100 million, for the wealth manager. Additionally, many factors such as an investor’s age, sex, number of children, income, wealth, investment horizon, ESG status, investment goal, and financial literacy were significantly related to an investor’s decision whether to make scheduled deposits and/or how much they eventually saved. The novelty of these findings rests on transaction-level records of realized saving rather than survey declarations, and on a within-investor design that compares the same client across scheduling and non-scheduling years. An economic theory is proposed to explain this counter-intuitive finding. Finally, a potential solution is described for wealth managers that are not currently optimizing their monthly deposits (or think that they are).