Financial advisor ethics: how institutional logics and self-determination influence advisors and their fiduciary duty

Rubin, Gary Douglas (2023) Financial advisor ethics: how institutional logics and self-determination influence advisors and their fiduciary duty. PhD thesis, University of Glasgow.

Abstract

In the United States, Registered Investment Advisor firms have a legal and arguably moral duty to provide advice in the best interest of their clients. However, advisors sometimes fall short of their responsibility leading to clients receiving suboptimal advice, paying for services they do not need, or willingly paying for needed advisory services but are underserved. To find solutions, the researcher begins by determining what gives rise to ethical failures among financial advisors. For this purpose, the researcher investigates competing intra-institutional logics at a large U.S.-based financial advisory firm utilizing a Q methodology study and semi-structured interviews.

Institutional logics theory and self-determination theory constitute the theoretical lenses used in the thesis. The current state of the literature is robust insofar as works relating to various forms of institutional logics and self-determination theory. However, the institutional logics literature is not so well developed regarding intra-institutional logics, which is the relevant issue here. Regarding self-determination theory, where the availability of relevant literature is deep, the researcher finds room to fill a gap by proposing a novel theoretical contribution to update the current self-determination theory framework model. At its essence, the thesis is a work about professional ethics with financial advisors as the focus. Within works found in the popular press, one can discover many articles dealing with financial advisor ethics. However, based on a systematic literature review, the same cannot be said for peer-reviewed academic works. This PhD research project is intended to help fill this along with the aforementioned gaps. The researcher also touches on agency theory and why it was not chosen as a theoretical lens to examine the organization, even though some might assume it would have been an obvious choice.

The emperical contribution derives from findings suggesting that although advisors are intrinsically motivated and care about client wellbeing, they lack sufficient autonomy, are unduly influenced by sales pressure, and are uneasy working in a sales culture that undermines executing their fiduciary responsibilities. The researcher concludes that it is necessary to change the standards for advisor performance evaluations and compensation plans for which recommendations are provided.

• Item Type: Thesis (PhD)
• Qualification Level: Doctoral
• Subjects: H Social Sciences > HG Finance
• Colleges/Schools: College of Social Sciences > Adam Smith Business School > Management
• Supervisor's Name: Anker, Dr. Thomas and Wu, Dr. Betty
• Date of Award: 2023
• Depositing User: Theses Team
• Unique ID: glathesis:2023-83753
• Copyright: Copyright of this thesis is held by the author.
• Date Deposited: 07 Aug 2023 10:22
• Last Modified: 07 Aug 2023 11:20
• Thesis DOI: 10.5525/gla.thesis.83753
• URI: https://theses.gla.ac.uk/id/eprint/83753