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1 – 10 of over 4000
Article
Publication date: 29 May 2023

Martha Wilcoxson and Jana Craft

This paper aims to explore the common ethical decision-making challenges faced by financial advisers and how they meet these challenges. The purpose is to identify successful…

Abstract

Purpose

This paper aims to explore the common ethical decision-making challenges faced by financial advisers and how they meet these challenges. The purpose is to identify successful decision-making tools used by investment advisers in doing business ethically. Additionally, the authors uncover common challenges and offer decision-making tools to provide support for supplemental ethics training in the future.

Design/methodology/approach

Questions were analyzed through a qualitative approach using individual interviews to examine a range of experiences and attitudes of active financial advisers. The sample was represented by 11 practicing financial advisers affiliated with US independent broker-dealers: six women and five men, each with 10 or more years of experience, ranging in age from 35 to 75. Grounded in four ethical decision-making models, this research examines individual ethical decision-making using individual (internal, personal) and organizational (external, situational) factors.

Findings

The method used uncovered struggles and revealed strategies used in making ethical decisions. Two research questions were examined: what are the common ethical decision-making challenges faced by financial advisers in the US financial industry? How do financial advisers handle ethical decision-making challenges? Four themes emerged that impacted ethical decision-making: needs of the individual, needs of others, needs of the firm and needs of the marketplace. Financial advisers identified moral obligation, self-control and consulting with others as major considerations when they contemplate difficult decisions.

Research limitations/implications

A limitation of this review is its small sample size. A more robust sample size from investment advisers with a broader range of experiences could have widened the findings from the study.

Practical implications

Investment advisers can use the findings of this study as a tool for improving their own ethical decision-making or designing training for their employees to be better decision-makers.

Originality/value

The study explores the decision-making experiences of investment advisers to reveal multifaceted, often private struggles that qualitative methods can uncover. The study provides support for the development of additional training in ethical decision-making specific to investment advisers.

Details

Qualitative Research in Financial Markets, vol. 16 no. 1
Type: Research Article
ISSN: 1755-4179

Keywords

Article
Publication date: 26 April 2013

Aegis J. Frumento and Stephanie Korenman

The purpose of this paper is to introduce the concept of professionalism into the current discussion of the proper scope of regulation of investment advisers.

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Abstract

Purpose

The purpose of this paper is to introduce the concept of professionalism into the current discussion of the proper scope of regulation of investment advisers.

Design/methodology/approach

The authors reviewed the scholarly literature on what constitutes a profession, the debates over the two bills introduced in Congress in 2012 concerning investment adviser regulation, and some of the studies that led up to those bills.

Findings

The authors concluded that professionalism could apply to some investment advisers, particularly financial planners, and that the development of such a profession should be encouraged. However, they found that such a profession would threaten the economic interests of broker‐dealers and their registered representatives, whose routine use of such titles as “financial advisor” or “investment consultant” has led to consumer confusion over the different roles of brokers and advisers. Therefore broker‐dealer interests favor more intense regulation of investment advisers by an SRO such as FINRA, presuming that would impair the development of a true profession of investment advisers.

Practical implications

This paper aims to ensure that the development of a true profession of investment advisers and/or financial planners is openly and fully debated if and when consideration of investment adviser regulation is reintroduced.

Originality/value

The role that professionalism can and should play in investment adviser regulation has not been previously discussed, even though broker‐dealer registered representatives routinely use confusingly professional‐sounding titles to compete against independent investment advisers.

Article
Publication date: 7 October 2019

Anastasia Suhartati Lukito

This paper aims to explain the regulations in Indonesia that apply to lawyers and other professional advisers in terms of their obligations as reporting parties of suspicious…

Abstract

Purpose

This paper aims to explain the regulations in Indonesia that apply to lawyers and other professional advisers in terms of their obligations as reporting parties of suspicious financial transactions with respect to money laundering and other financial crimes. As lawyers and other professional advisers offer services to the business community in Indonesia, they are vulnerable to becoming parties to illegal business transactions. The results could lead to bribery, graft, tax crime and corruption in Indonesia.

Design/methodology/approach

This paper explores and analyzes the obligations of lawyers and other professional advisers under Indonesian law, with particular reference to their obligations as reporting parties in efforts to prevent economic crime within the country’s business community.

Findings

Lawyers and other professional advisers, as reporting parties, can be viewed as the gatekeepers that inhibit economic and financial crimes. Consequently, a new perspective is needed for all of the legal professions so that they can protect themselves from the risks of being targeted by nefarious clients/offenders. To strengthen the role of these advisers, it is recommended that both a code of ethics and know your customer principle to be implemented.

Practical implications

This paper can serve as a resource that explores the functions of lawyers and other professional advisers as reporting parties whose aim is to prevent financial and economic crime in Indonesia.

Originality/value

This paper encourages lawyers, other professional advisers, and public and private institutions to implement a code of ethics, and also integrity and professionalism, with a view to preventing economic and financial crimes. According to the code, the functions and obligations of lawyers and other professional advisers include discouraging such offenses. The code becomes effective when legal professionals adhere to legal ethics and integrity.

Details

Journal of Financial Crime, vol. 26 no. 4
Type: Research Article
ISSN: 1359-0790

Keywords

Abstract

Details

Journal of Financial Regulation and Compliance, vol. 11 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

Article
Publication date: 4 February 2014

Cathrine Filstad

The aim of this paper is to investigate how political activities and processes influence sensemaking and sensegiving among top management, middle management and employees and to…

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Abstract

Purpose

The aim of this paper is to investigate how political activities and processes influence sensemaking and sensegiving among top management, middle management and employees and to examine its consequences for implementing new knowledge.

Design/methodology/approach

Data were collected in a Norwegian bank using in-depth interviews with middle managers and financial advisers. Observations of meetings, informal conversations and verbatim notes were also used in data collection among top managers. A practice-based approach was used as an analytical lens.

Findings

Top managers' political activities of excluding others from the decision process affect their sensemaking and resulted in sensegiving contradictions between spoken intent and how to change practice. Middle managers' political activities were to accept top managers' sensegiving instead of managing themselves in their own sensemaking to help financial advisers with how to change their role and practice. As a result, middle managers' sensemaking affects their engagement in sensegiving. For financial advisers, the political processes of top and middle managers resulted in resistance and not making sense of how to change and implement new knowledge.

Research limitations/implications

A total of 30 in-depth interviews, observations of five meetings and informal conversations might call for further studies. In addition, a Norwegian study does not account for other countries' cultural differences concerning leadership style, openness in decisions and employee autonomy.

Originality/value

To the author's knowledge, no studies identify the three-way conceptual relationship between political activities, sensemaking and sensegiving. In addition, the author believes that the originality lies in investigating these relationships using a three-level hierarchy of top management, middle management and employees.

Details

Journal of Workplace Learning, vol. 26 no. 1
Type: Research Article
ISSN: 1366-5626

Keywords

Article
Publication date: 9 January 2017

Stuart Grierson and Ross Brennan

The purpose of this paper is to address the following research question: What are the perceptions of professionals and consumers regarding the antecedents of client referrals in…

Abstract

Purpose

The purpose of this paper is to address the following research question: What are the perceptions of professionals and consumers regarding the antecedents of client referrals in the financial advice sector?

Design/methodology/approach

A total of 61 qualitative interviews were conducted, with the following three key groups: independent financial advisers (IFAs; 20 interviews), clients of IFAs (26 interviews) and consumers who manage their own financial affairs and do not use the services of an IFA (15 interviews).

Findings

The financial advisers interviewed believe that client referrals are important to their business success, that they can influence clients to become ambassadors who will consciously seek out new clients and that excellent service will motivate clients to provide referrals. However, the interviews with the clients painted a different picture. While advisers believe that they can influence client referral behavior, the clients did not believe that they were influenced by the adviser to make referrals.

Research limitations/implications

The sampling method was non-random and relied on the professional contacts of the principal researcher as a starting point, from which a network of contacts was established to identify interviewees. The study casts doubt on the ability of professional service providers to influence client referral behavior. This novel finding deserves further research investigation.

Practical implications

There is clearly scope for greater measurement in connection with referrals in professional service businesses. The propensity for clients to refer should be included as a metric in the performance measurement of professional service providers, in addition to standard financial measures. This would encourage the service provider to consider referrals during client interactions.

Originality/value

The study reports on a substantial qualitative study involving both professional service providers and their clients. While the providers believe that client referrals are critical to their business success, the evidence collected provides little or no support for this belief. Clients report they are not motivated to refer. Advisers do not explicitly measure referrals. The reality of referrals seems not to match the mythology.

Details

Qualitative Market Research: An International Journal, vol. 20 no. 1
Type: Research Article
ISSN: 1352-2752

Keywords

Article
Publication date: 7 November 2016

Kenneth J. Laverierre and Matthew H. Behrens

To describe the main provisions of the US Department of Labor’s final “fiduciary” rule and its related prohibited transaction exemptions and the key challenges the rule poses for…

Abstract

Purpose

To describe the main provisions of the US Department of Labor’s final “fiduciary” rule and its related prohibited transaction exemptions and the key challenges the rule poses for financial advisers.

Design/methodology/approach

This article describes the impact of the new “fiduciary” rule on broker-dealers, banks and other financial organizations who will, for the first time since the passage of ERISA, be subject to ERISA’s fiduciary standards and remedies when providing investment and asset management recommendations to individual retirement accounts and other retail retirement clients.

Findings

The most immediate impact of the rule will be on the compensation practices at broker-dealers and other financial institutions and on the fee and revenue sharing arrangements among funds, fund sponsors and the financial institutions that offer investment advice to retail retirement clients. Although the new rule responds to many of the concerns raised by the financial services industry, compliance with the rule will require the restructuring of pay and compliance policies at financial institutions servicing retail clients.

Originality/value

Practical guidance from experienced ERISA lawyers.

Details

Journal of Investment Compliance, vol. 17 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 1 May 2004

Stephen Diacon

This paper presents the results of a detailed comparison of the perceptions by individual consumers and expert financial advisers of the investment risk involved in various UK…

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Abstract

This paper presents the results of a detailed comparison of the perceptions by individual consumers and expert financial advisers of the investment risk involved in various UK personal financial services' products. Factor similarity tests show that there are significant differences between expert and lay investors in the way financial risks are perceived. Financial experts are likely to be less loss averse than lay investors, but are prone to affiliation bias (trusting providers and salesmen more than lay investors do), believe that the products are less complex, and are less cynical and distrustful about the protection provided by the regulators. The traditional response to the finding that experts and non‐experts have different perceptions and understandings about risk is to institute risk communication programmes designed to re‐educate consumers. However, this approach is unlikely to be successful in an environment where individual consumers distrust regulators and other experts.

Details

International Journal of Bank Marketing, vol. 22 no. 3
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 1 January 2004

Terrance J. O’Malley

A hedge fund manager typically falls within the definition of an “investment adviser” under the Investment Advisers Act of 1940 (“Advisers Act”). Persons who fall within this…

Abstract

A hedge fund manager typically falls within the definition of an “investment adviser” under the Investment Advisers Act of 1940 (“Advisers Act”). Persons who fall within this definition generally must register with the SEC and are subject to all applicable requirements under the Advisers Act and it related rules. However, the Advisers Act and its rules currently provide an exemption from SEC registration that is available to many hedge fund managers. In light of recent suggestions by SEC officials to greatly restrict or eliminate the exemption, this article summarizes the most significant consequences of SEC registration for hedge fund managers.

Details

Journal of Investment Compliance, vol. 5 no. 1
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 13 December 2021

Sanna Nuutinen, Salla Ahola, Juha Eskelinen and Markku Kuula

This study aims to provide insight into the relationship between job resources (job control and possibilities for development at work) and employee performance, measured as…

Abstract

Purpose

This study aims to provide insight into the relationship between job resources (job control and possibilities for development at work) and employee performance, measured as employee productivity and technology-enabled performance, by examining the role of employee well-being (work engagement and emotional exhaustion).

Design/methodology/approach

The data comprised two overlapping data sets collected from a large financial institution; Study 1 employed survey data (N = 636), whereas study 2 employed register data on job performance collected over a one-year period combined with survey data (N = 143). The data were analysed through structural equation modelling.

Findings

Study 1 indicated that job resources were positively associated with technology-enabled performance more strongly through work engagement than emotional exhaustion. Study 2 revealed that emotional exhaustion was associated with lower employee productivity, whereas work engagement was not. Furthermore, the results indicated that job control was related to higher productivity through a lower level of emotional exhaustion.

Practical implications

The study's findings point to the importance of developing interventions that decrease emotional exhaustion.

Originality/value

This is one of the first studies to measure employee productivity longitudinally as a ratio of inputs (working time) to outputs (relevant job outcomes) over one year. This study contributes to the job demands–resources model (JD-R) literature by showing the importance of job control in fostering both employee productivity and more positive perceptions of technology.

Details

Journal of Organizational Effectiveness: People and Performance, vol. 9 no. 2
Type: Research Article
ISSN: 2051-6614

Keywords

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