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Author: Thomas Mccann
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
The purpose of this document is to explore the principal-agent problem that exists between financial advisors and their clients. My thesis is that there is an inherent principle-agent problem in the financial services industry that is often exploited. As a result, the current relationship between financial advisors and their clients must be reevaluated. By looking at quantitative methods of evaluating a principal-agent problem and applying it to the world of financial services, it is clear that there are alternatives to a financial advisor that would be better for the retail investor. Due to this fact, a new contract is required to mitigate the principal-agent problem. To create this new contract, I have analyzed the texts of Adam Smith and Immanuel Kant and have drafted their philosophies to better illustrate the actual role of the financial advisor. By adjusting the role of financial advisor to become similar to that of a teacher, and restructuring their payment incentives, the principal-agent problem is lessened and utilizing a financial advisor becomes a more appealing option for the retail investor.
Author: Thomas Mccann
Publisher:
ISBN:
Category :
Languages : en
Pages :
Get Book Here
Book Description
The purpose of this document is to explore the principal-agent problem that exists between financial advisors and their clients. My thesis is that there is an inherent principle-agent problem in the financial services industry that is often exploited. As a result, the current relationship between financial advisors and their clients must be reevaluated. By looking at quantitative methods of evaluating a principal-agent problem and applying it to the world of financial services, it is clear that there are alternatives to a financial advisor that would be better for the retail investor. Due to this fact, a new contract is required to mitigate the principal-agent problem. To create this new contract, I have analyzed the texts of Adam Smith and Immanuel Kant and have drafted their philosophies to better illustrate the actual role of the financial advisor. By adjusting the role of financial advisor to become similar to that of a teacher, and restructuring their payment incentives, the principal-agent problem is lessened and utilizing a financial advisor becomes a more appealing option for the retail investor.
Author:
Publisher: GRIN Verlag
ISBN: 3346416925
Category : Business & Economics
Languages : en
Pages : 18
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Book Description
Seminar paper from the year 2018 in the subject Economics - Micro-economics, grade: 2,0, University of Hohenheim, language: English, abstract: This paper studies the relationship between investors and investment advisers with regard to the principal-agent theory. Especially, the payment of commissions, kick-backs or other inducements from product provider to financial adviser and their impact of product recommendations are the focus of this paper. At the end, this paper should answer the research question, to what extent is the investor-investment adviser relationship a principal-agent relationship and how do commission payments affect the decision of both participants. Furthermore, this paper contents the political aspect, especially the analysis of the latest German policy with regard to consumer protection in financial markets. This paper is divided in six chapters. Chapter 2 is a definition and classification of various types of financial advisers. In chapter 3, this work elaborates the principal-agent theory and compare it to our case of financial advice. In chapter 4, we set up a model of the interdependence between product provider, adviser and customer. In addition, this model gives information about payments and related incentives. The following 5th chapter, analyzes the latest policy intervention of the European Union with regard to the German financial advice market. The last chapter is a conclusion of the previous chapters.
Author: Michael Edesess
Publisher: Berrett-Koehler Publishers
ISBN: 1605093912
Category : Business & Economics
Languages : en
Pages : 315
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Book Description
No professional investing advice is good advice. This hard-hitting book proves it with indisputable facts drawn from scientific research and the author's own thirty-five years of experience in the investment industry. Michael Edesess exposes “The Big Investment Lie”: that an investor will gain by hiring professional advisors to beat the market. He proves that no professional investment advisor or manager has ever consistently and predictably beat market averages, not even Warren Buffett. While The Big Investment Lie allows an entire industry to prosper lavishly, investors invariably lose when they hire professional help. Once you know the truth, you'll want to adopt Edesess's Ten New Commandments for Smart Investing, simple rules you can follow to invest, get a profitable return, and avoid squandering any more of your hard-earned dollars on bogus expertise.
Author: Paul Weirich
Publisher: Oxford University Press, USA
ISBN: 0190089415
Category : Philosophy
Languages : en
Pages : 283
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Book Description
"A philosophical account of risk, such as this book provides, states what risk is, which attitudes to it are rational, and which acts affecting risks are rational. Attention to the nature of risk reveals two types of risk, first, a chance of a bad event, and, second, an act's risk in the sense of the volatility of its possible outcomes. The distinction is normatively significant because different general principles of rationality govern attitudes to these two types of risk. Rationality strictly regulates attitudes to the chance of a bad event and is more permissive about attitudes to an act's risk. Principles of rationality governing attitudes to risk also justify evaluating an act according to its expected utility given that the act's risk, if any, belongs to every possible outcome of the act. For a rational ideal agent, the expected utilities of the acts available in a decision problem explain the agent's preferences among the acts. Maximizing expected utility is just following preferences among the acts. This view takes an act's expected utility, not just as a feature of a representation of preferences among acts, but also as a factor in the explanation of preferences among acts. It takes account of an agent's attitudes to an act's risk without weakening the standard of expected-utility maximization. The view extends to evaluations of combination of acts, either simultaneous or in a sequence. Applications cover hedging, return-risk evaluation, professional advice, and government regulation"--
Author: James M. Dahle
Publisher: White Coat Investor LLC the
ISBN: 9780991433100
Category : Business & Economics
Languages : en
Pages : 160
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Book Description
Written by a practicing emergency physician, The White Coat Investor is a high-yield manual that specifically deals with the financial issues facing medical students, residents, physicians, dentists, and similar high-income professionals. Doctors are highly-educated and extensively trained at making difficult diagnoses and performing life saving procedures. However, they receive little to no training in business, personal finance, investing, insurance, taxes, estate planning, and asset protection. This book fills in the gaps and will teach you to use your high income to escape from your student loans, provide for your family, build wealth, and stop getting ripped off by unscrupulous financial professionals. Straight talk and clear explanations allow the book to be easily digested by a novice to the subject matter yet the book also contains advanced concepts specific to physicians you won't find in other financial books. This book will teach you how to: Graduate from medical school with as little debt as possible Escape from student loans within two to five years of residency graduation Purchase the right types and amounts of insurance Decide when to buy a house and how much to spend on it Learn to invest in a sensible, low-cost and effective manner with or without the assistance of an advisor Avoid investments which are designed to be sold, not bought Select advisors who give great service and advice at a fair price Become a millionaire within five to ten years of residency graduation Use a "Backdoor Roth IRA" and "Stealth IRA" to boost your retirement funds and decrease your taxes Protect your hard-won assets from professional and personal lawsuits Avoid estate taxes, avoid probate, and ensure your children and your money go where you want when you die Minimize your tax burden, keeping more of your hard-earned money Decide between an employee job and an independent contractor job Choose between sole proprietorship, Limited Liability Company, S Corporation, and C Corporation Take a look at the first pages of the book by clicking on the Look Inside feature Praise For The White Coat Investor "Much of my financial planning practice is helping doctors to correct mistakes that reading this book would have avoided in the first place." - Allan S. Roth, MBA, CPA, CFP(R), Author of How a Second Grader Beats Wall Street "Jim Dahle has done a lot of thinking about the peculiar financial problems facing physicians, and you, lucky reader, are about to reap the bounty of both his experience and his research." - William J. Bernstein, MD, Author of The Investor's Manifesto and seven other investing books "This book should be in every career counselor's office and delivered with every medical degree." - Rick Van Ness, Author of Common Sense Investing "The White Coat Investor provides an expert consult for your finances. I now feel confident I can be a millionaire at 40 without feeling like a jerk." - Joe Jones, DO "Jim Dahle has done for physician financial illiteracy what penicillin did for neurosyphilis." - Dennis Bethel, MD "An excellent practical personal finance guide for physicians in training and in practice from a non biased source we can actually trust." - Greg E Wilde, M.D Scroll up, click the buy button, and get started today!
Author: Sanford J. Grossman
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 48
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Book Description
Author: Mads Andenas
Publisher: Routledge
ISBN: 113504337X
Category : Law
Languages : en
Pages : 556
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Book Description
Financial regulation has entered into a new era, as many foundational economic theories and policies supporting the existing infrastructure have been and are being questioned following the financial crisis. Goodhart et al’s seminal monograph "Financial Regulation: Why, How and Where Now?" (Routledge:1998) took stock of the extent of financial innovation and the maturity of the financial services industry at that time, and mapped out a new regulatory roadmap. This book offers a timely exploration of the "Why, How and Where Now" of financial regulation in the aftermath of the crisis in order to map out the future trajectory of financial regulation in an age where financial stability is being emphasised as a key regulatory objective. The book is split into four sections: the objectives and regulatory landscape of financial regulation; the regulatory regime for investor protection; the regulatory regime for financial institutional safety and soundness; and macro-prudential regulation. The discussion ranges from theoretical and policy perspectives to comprehensive and critical consideration of financial regulation in the specifics. The focus of the book is on the substantive regulation of the UK and the EU, as critical examination is made of the unravelling and the future of financial regulation with comparative insights offered where relevant especially from the US. Running throughout the book is consideration of the relationship between financial regulation, financial stability and the responsibility of various actors in governance. This book offers an important contribution to continuing reflections on the role of financial regulation, market discipline and corporate responsibility in the financial sector, and upon the roles of regulatory authorities, markets and firms in ensuring the financial health and security of all in the future.
Author: Federico Della Negra
Publisher: Bloomsbury Publishing
ISBN: 1509925309
Category : Law
Languages : en
Pages : 288
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Book Description
In the wake of the global financial crisis, investors have suffered significant losses as a result of breaches of conduct of business rules in the distribution of financial instruments. MiFID II introduced new disclosure, distribution and product governance rules to strengthen the protection of investors but, like MiFID I, did not harmonise the civil law consequences for their violation. This book asks whether, in spite of the silence of the EU legislators, the MiFID II conduct of business rules may produce civil law effects, enabling investors to enforce them against investment firms before national courts and alternative dispute resolution (ADR) mechanisms. Building on the case law of the CJEU, the book shows the conditions under which the breach of MiFID II conduct of business rules should give rise to a private law remedy, and what remedies would be compatible with EU law. MiFID II and Private Law is an essential contribution to academic research in EU and financial law and will be a key text for policy-makers and legal practitioners working in the field of investor protection regulation and mis-selling litigation.
Author: Angela A. Hung
Publisher: Rand Corporation
ISBN: 0833045016
Category : Law
Languages : en
Pages : 151
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Book Description
In theory, financial professionals are relatively distinct: A broker-dealer conducts transactions in securities on behalf of itself and others; and an investment adviser provides advice to others regarding securities. Different laws regulate each type of professional, but boundaries have blurred. This report examines current business practices and investor understanding of each type.
Author: Peter Stanyer
Publisher: The Economist
ISBN: 1610399870
Category : Business & Economics
Languages : en
Pages : 352
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Book Description
Now in its fourth edition, this classic guide to investment strategy has been revised to give up-to-date ideas on pensions, investments of passion and more. Peter Stanyer and Stephen Satchell's Guide to Investment Strategy looks at the risks and opportunities of uncomplicated strategies and comes with wealth warnings for those who wish to explore more sophisticated approaches. It explains the importance of insights from behavioral analysis, the principles of traditional finance, and highlights how habitual patterns of decision-making can lead any of us into costly mistakes. After all, markets are most dangerous when most rewarding.
