How Does the Economy Shape the Financial Advisory Profession?

Hard times breed advisors with lower misconduct

Key Takeaways:

• Financial advisors who start their careers during recessions are less likely to commit misconduct compared to those who start during other times.

• Recessions have a lasting impact on financial advisors by exposing them to different firm culture and local norms at the beginning of their careers.

• After long periods of economic expansion, the pool of financial advisors will be skewed towards those who are more likely to engage in misconduct.

• To reduce misconduct among financial advisors, stricter screening criteria, training and monitoring at the beginning of their careers may be necessary.