Abstract
We examine the relation between public concern about immigration and customer complaints against minority financial advisors in the United States. We find that minority advisors are more likely to receive complaints in periods of high public concern about immigration than in other periods, relative to their white colleagues from the same firm, at the same office location, and at the same point in time. This result holds for both complaints with merit and dismissed complaints and is more pronounced in counties where residents likely hold stronger anti-immigration views. We also find that minority advisors are more likely to face regulatory actions or leave their firms after customer allegations in periods of high public concern about immigration than in other periods. Overall, our study provides descriptive evidence of a positive relation between public concern about immigration and customer dissatisfaction with minority advisors. This paper was accepted by Suraj Srinivasan, accounting. Funding: K. K. F. Law acknowledges financial support from a Nanyang Technological University’s Start-Up Grant. L. Zuo acknowledges financial support from the Cornell SC Johnson College of Business and fromUniversity of Toronto RogerMartin Award for Emerging Leaders. Supplemental Material: Code is available at https://doi.org/10.1287/mnsc.2021.4283 .
Highlights
The United States has the largest number of immigrants in the world
We find that minority advisors are more likely to face regulatory actions or leave their firms after customer allegations in periods of high public concern about immigration than in other periods
We find that minority advisors are more likely to face regulatory actions or leave their firms after customer allegations in periods of high immigration concern than in other periods
Summary
The United States has the largest number of immigrants (i.e., foreign-born population) in the world. Immigrant populations in many other developed countries (e.g., Canada, Germany, and the United Kingdom) have risen rapidly. Given this global trend, a growing body of research has been developed to understand the formation and implications of public concern about immigration (Facchini and Mayda 2009; Hainmueller and Hopkins 2014; Baker et al 2015, 2016). We examine the relation between public concern about immigration and customer complaints against minority advisors in the financial advisory industry. We first construct a panel of all financial advisors (around 1.3 million) who were registered with the U.S Financial
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