The research summarized in the article in the url below contains some worrying information about the financial advising industry:
"[Research published by] the University of Chicago and University of Minnesota found that 7 percent of financial advisers have been disciplined for misconduct that ranges from putting clients in unsuitable investments to trading on client accounts without permission. That's a troubling mark for an industry that relies on the trust of clients."
More worrying is that the 7% number is only an average. While the 'cleanest' companies such as Morgan Stanley and Goldman Sachs had less than 1% of their advisers who had been disciplined in this way, in some companies (which interestingly, given recent events, includes Wells Fargo) the number was above 15% and, in other companies, it was higher still:
"Nearly 20 percent of financial advisers at Oppenheimer & Co., with more than 2,000 advisers counted in the study, have misconduct records, according to the new paper."
Also disconcerting was that, although these advisers were initially punished, there did not appear to be any lasting stigma attached to their transgressions. In fact, it looks as though whatever drove them to transgress in the first place is a skillset that is in demand in this industry:
"Misconduct isn't left unchecked by financial firms. About half of advisers found to have committed misconduct are fired—although 44 percent of advisers who leave a job due to misconduct are hired by another firm within a year, according to the paper."
This is in spite of an elevated risk of future transgressions by past offenders:
"Many fired advisers end up moving to firms that have higher rates of misconduct than their previous employer did, and they become repeat offenders. 'Prior offenders are five times as likely to engage in new misconduct as the average financial adviser,' the study found."
For a list of the Top 10 and Bottom 10 companies in the industry in terms of the percentage of advisers who have been disciplined, see:
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It Just Got Even Harder to Trust Financial Advisers
By Suzanne Woolley
March 1, 2016