Who is Less Likely to Be Involved in Financial Advisor Misconduct?

Abstract

We study two characteristics found to be associated with reduced financial advisor misconduct: gender and professional designations. Our findings suggest consumer guidelines helpful in avoiding adverse advisor experiences. These can be especially valuable given the advisory market’s absence of clear, uniform standards to assess financial advisory professionals. We find that female advisors are statistically less likely to be engaged in misconduct. In addition, we find that female advisors with a CFP or ChFC designation are less likely to exhibit disclosed misconduct as compared to male and female advisors who have at least one of the CFP, ChFC, or CFA designations. Our findings offer another powerful reason why attracting females to the industry is important and why advanced financial planning training may improve consumer outcomes.