In the aggregate, retail investors allocate tremendous amounts of capital and often turn to financial advisers to help them pick the best investment opportunities. In a recently published article, I describe how financial adviser conflicts of interest now distort overall capital allocation by driving capital to investment opportunities that reward financial advisers—altering the flow of capital.
Our capital markets work best when they efficiently move capital from savers to opportunities in need of capital. Financial intermediaries make our capital markets work by connecting savers to these opportunities. Of course, these intermediaries do not work for free. Stockbrokers receive commissions … Read more