Misconduct in Financial Services: Differences across Organizations

37 Pages Posted: 28 Aug 2015

See all articles by Jennifer Brown

Jennifer Brown

University of Utah - Department of Finance

Dylan Minor

Anderson School of Management (UCLA)

Date Written: August 1, 2015

Abstract

We examine misconduct in financial services. We propose a theory in which experts extract surplus based on the value of their firm’s brand and their own skills. Using sales complaint data for insurance agents, we find that agents working exclusively for large branded firms are more likely to be the subject of justified sales complaints, relative to smaller independent experts, despite doing substantially less business. In addition, more experienced experts attract more complaints per year.

Keywords: Misconduct, expert services, asymmetric information, credence goods, insurance, ethics

Suggested Citation

Brown, Jennifer and Minor, Dylan, Misconduct in Financial Services: Differences across Organizations (August 1, 2015). Harvard Business School Strategy Unit Working Paper No. 16-022. Available at SSRN: https://ssrn.com/abstract=2651907 or http://dx.doi.org/10.2139/ssrn.2651907

Jennifer Brown

University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States

Dylan Minor (Contact Author)

Anderson School of Management (UCLA) ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

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