The Market for Financial Adviser Misconduct

Paper: SSRN 2739170

Abstract

We construct a novel database containing the universe of financial advisers in the United States from 2005 to 2015, representing approximately 10% of employment

Complexity vs Empirical Score

• Math Complexity: 2.0/10
• Empirical Rigor: 9.0/10
• Quadrant: Street Traders — practical and empirical, lighter on theory

Why this score: The paper relies primarily on descriptive statistics and econometric analysis of a large administrative dataset rather than complex mathematical modeling, and its core contribution is the construction and exhaustive analysis of a novel, comprehensive database ready for empirical validation.

Research Flowchart

  flowchart TD
  A["Research Goal: How does adviser misconduct<br>shape the market for financial advice?"] --> B
  
  subgraph B["Methodology & Data"]
      direction LR
      B1["Novel Database:<br>US Financial Advisers 2005-2015"]
      B2["Data Source: Form ADV<br>Investment Adviser Public Disclosure"]
      B1 --> B2
  end
  
  B --> C{"Key Method: Difference-in-Differences"}
  C --> D["Computational Process:<br>Estimate Treatment Effects"]
  D --> E
  
  subgraph E["Key Findings/Outcomes"]
      direction LR
      E1["Misconduct Advisers<br>Switch Firms More Often"]
      E2["Sanctions Reduce<br>Client Assets by 12%"]
      E3["Market Segments by<br>Adviser Quality"]
  end