Chapter 6: Financial Planners and Advisors

Financial Behavior: Players, Services, Products, and Markets. H. Kent Baker, Greg Filbeck, and Victor Ricciardi, editors, 97-117, New York, NY: Oxford University Press, 2017.

Posted: 6 Jun 2017

See all articles by Benjamin F. Cummings

Benjamin F. Cummings

The American College of Financial Services

Date Written: June 1, 2017

Abstract

An increasing number of households use financial planners or advisors. This chapter provides insight into these professionals, their potential motivations, and their interactions with clients. The various regulatory regimes of financial planners and advisors are discussed, including the most common types: registered investment advisers, broker-dealers, and insurance firms. Agency costs associated with employing a financial planner are also discussed, with emphasis on potential conflicts of interest that arise from some compensation structures. Common areas of consumer confusion are highlighted. The chapter also discusses evidence on the use and value of financial advice. It concludes with some recommendations for consumers about selecting a financial planner or advisor.

Keywords: behavioral finance, behavioural finance, financial planners, financial advisors, agency costs, conflicts of interest, registered investment advisers, broker-dealers

JEL Classification: A12, D81, G00, G30, G10, M00, M10, M41

Suggested Citation

Cummings, Benjamin F., Chapter 6: Financial Planners and Advisors (June 1, 2017). Financial Behavior: Players, Services, Products, and Markets. H. Kent Baker, Greg Filbeck, and Victor Ricciardi, editors, 97-117, New York, NY: Oxford University Press, 2017., Available at SSRN: https://ssrn.com/abstract=2980023

Benjamin F. Cummings (Contact Author)

The American College of Financial Services ( email )

270 S. Bryn Mawr Avenue
Bryn Mawr, PA 19010
United States

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