We test whether personal real estate shocks affect professional misconduct by financial advisors. We use a panel of advisors' home addresses and examine within-advisor variation relative to other advisors who work at the same firm and live in the same ZIP code. We find a negative relation between housing returns and misconduct. We show that advisors' housing returns explain misconduct against out-of-state customers, breaking the link between customer and advisor housing shocks. Furthermore, the results are stronger for advisors with lower career risk from committing misconduct, and for advisors with greater borrowing constraints.
|Number of pages||38|
|Journal||Journal of Finance|
|State||Published - Dec 2021|
Bibliographical notePublisher Copyright:
© 2021 the American Finance Association
ASJC Scopus subject areas
- Economics and Econometrics