Investment Advisors' Perceptions and Reactions to Liability Exposure

by Bill Scroggins, Jr., Louise J. Clark, Gail Jones, and Elise Gantt

This paper presents the results of a study of investment advisors concerning their perceptions of and reactions to liability exposure. Attention is focused on the types of conduct giving rise to such liability and what actions may be taken to forestall lawsuits. Results indicate that (1) practitioners are concerned about liability exposure and have taken actions to reduce it and (2) lawsuits/arbitration actions are not common, but less formal accusations are rife.

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