Origins of financial analysts in the United States

Abstract

Since the United States securities market's creation and promulgation of the Investment Advisers Act in 1940, financial analysts transitioned from a highly unregulated practice to one of the most heavily regulated professions. Relying on multiple formal archival sources, this article explores the antecedents behind this bolstering event. Applying a chronological historical analysis, findings suggest that three factors forced regulators to intervene: the unethical abuses uncovered by a committee with highly specialised skills, the inability of financial analysts to adhere to ethical practices and professional segregation combined with absent collective institutional values. These findings illustrate the regulatory consequences in collective sanctioning cases (rather than criminal or economic penalties imposed on specific individuals). A socio-economic historical triangulation enriches the quality of these findings.