Financial advising in the presence of conflict of interests

Miriam Krausz, Jacob Paroush

Research output: Contribution to journalArticlepeer-review

11 Scopus citations


In this paper we study the conflict faced by a financial advisor in allocating an investor's wealth between a risky asset and the riskless asset. The investor is dependent on the financial advisor's information for making an allocation decision while the financial advisor can give deceptive information according to her interests in these assets. The results show how the level of deception is affected by the investor's characteristics, represented by wealth and attitude towards risk, by the characteristics of assets, represented by riskiness and by the market structure represented by level of competition.

Original languageEnglish
Pages (from-to)55-71
Number of pages17
JournalJournal of Economics and Business
Issue number1
StatePublished - 2002


  • Conflict of interests
  • Deception
  • Financial advisor


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