Download This Article

Benjamin F. Cummings, Michael S. Finke


This paper reviews economic theory related to investment advice. This theory explains 1) why financial advisors need to be carefully regulated for the benefit of both the investment advice industry and for consumers, 2) why principles-based regulation (e.g., a fiduciary standard) is more efficient than rules-based regulation, 3) why dual regulation of financial professionals providing investment or insurance advice is inefficient and inequitable policy, and 4) why the application of a universal and uniform fiduciary standard will be difficult to implement.

Keywords: Households, Financial Advice, Regulation

How to cite this paper: Cummings, B. F., & Finke, M. S. (2012). Regulating household financial advice. Journal of Governance and Regulation, 1(3), 50-54.