Impacts of Conflicts of Interest in the Financial Services Industry

Who Feels the Nudge? Knowledge, Self-Awareness and Retirement Savings Decisions

“…Finally, our work adds to the literature that explores conflicts of interests and the role of advisors in retail financial markets. This literature is too vast to summarize here; see Burke et al (2015) for a comprehensive review.…”

Can Regulation Improve Financial Information and Advice?

“…Financial advisors and sales agents are an important source of information for consumers, but are also in a position to exploit consumers' lack of information. A recent review of academic literature in this area concludes that there is substantial evidence of bias and conflicts of interest in markets for financial advice (Burke et al, 2015). The history of financial advice scandals provides additional evidence of bias in perhaps more practical and measurable terms (e.g.…”

“…There appear to be several potential unwanted effects of the commission ban. First, survey evidence suggests that consumers prefer commission-based relationships with financial advisors and sales agents (Burke et al, 2015), which might lead consumers to forego advice-seeking under fee-based systems. Moreover, theoretical work suggests that removing commission payments for agents and advisors may give financial services firms incentives to bypass the advisor/agent channel and market directly to unsophisticated consumers.…”

Conflict of Interest, Disclosure and Vertical Relationships: An Experimental Analysis

“…A recent comprehensive survey of, inter alia , the experimental and survey literature on the financial advisor/client relationship can be found in Burke et al . (). They find a great deal of evidence that advisors do indeed respond to the incentives they face and act opportunistically to the detriment of their clients.…”

“…As concerns over conflict of interest have recently gained increased attention from policy-makers worldwide, so too an academic literature has risen around that issue and the efficacy of disclosure. A recent comprehensive survey of, inter alia, the experimental and survey literature on the financial advisor/client relationship can be found in Burke et al (2014). They find a great deal of evidence that advisors do indeed respond to the incentives they face and act opportunistically to the detriment of their clients.…”