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The primacy of ethics in the provision of financial advice
Author(s) -
Bruhn Aaron,
Asher Anthony
Publication year - 2021
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12703
Subject(s) - advice (programming) , public relations , virtue ethics , business , virtue , political science , accounting , finance , law , computer science , programming language
Abstract Most people need professional advice to navigate complex financial markets. However, information asymmetry between adviser and client makes the assessment of advice difficult, and is exacerbated when providers are motivated by self‐interest. This undermines the effectiveness of the financial system. New regulations aim to mitigate such issues, prohibiting some conflicts of interest and imposing educational requirements and a code of ethics for financial advisers practising in Australia. An Australian case study highlights the main ethical issues and suggests that the lens of virtue ethics can assist the development of more appropriate financial advice, and inform further regulatory developments.