Relation between financial advisory designations and FINRA misconduct FSR201714

Abstract

Registered representatives have no general fiduciary duty. CFP, ChFC, and CFA designees have higher ethical duties and education requirements. Registrants’ criminal, regulatory, complaint, and other misconduct history is public. This study examines misconduct disclosures of undesignated versus designated Florida securities salespeople, and finds adverse disclosure materially decreases for designees; it incidentally finds misconduct increases with maleness, dual investment advisor/regis-tered representative status, and life insurance sales licensure. This appears to be the first such study of adverse disclosure association with financial designations, adding to the emerging misconduct and advisors’ ethics literature. These findings offer important policy and consumer choice insight. © 2017 Academy of Financial Services. All rights reserved.