Work

The Market for Financial Adviser Misconduct

Year: 2018

Type: article

Abstract: We document the economywide extent of misconduct among financial advisers and the associated labor market consequences. Seven percent of advisers have misconduct records, and this share reaches more than 15 percent at some of the largest firms. Roughly one-third of advisers with misconduct are repeat offenders. Approximately half of advisers lose their jobs after misconduct. The labor market partially undoes firm-level discipline by rehiring such advisers. Firms that persistently engage in misconduct coexist with firms that have clean records. We show that this phenomenon may be explained by some firms “specializing” in misconduct and catering to unsophisticated consumers.

Source: Journal of Political Economy

DOI: 10.1086/700735

Authors: Mark Egan, Gregor Matvos, Amit Seru

Institutions: Harvard University, The University of Texas at Austin, Stanford University

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W3123112479