The Dodd-Frank Act shifted regulatory jurisdiction over “midsize” investment advisers from the SEC to state-securities regulators. Client complaints against midsize advisers increased relative to those continuing under SEC oversight by 30 to 40 percent of the unconditional probability. Complaints increasingly cited fiduciary violations and rose more where state regulators had fewer resources. Advisers responding more to weaker oversight had past complaints, were located farther from regulators, faced less competition, had more conflicts of interest, and served primarily less-sophisticated clients. Our results inform optimal regulatory design in markets with informational asymmetries and search frictions.
Academic & Professional Qualification
- PhD, Cornell University
- BA, Dartmouth College
Alan KWAN received his PhD from the Johnson School of Management at Cornell University and his BA from Dartmouth College. Between school, he worked in the hedge fund, software development and consulting industries. His research interests focus on corporate finance, financial advice and investments.
- Corporate finance
- Financial advice
- “Social Connections with COVID-19-affected Areas Increase Compliance with Mobility Restrictions” with Ben Charoenwong and Vesa Pursiainen, Science Advances, forthcoming.
- “Does Regulatory Jurisdiction Affect the Quality of Investment-Adviser Regulation?” with Ben Charoenwong and Tarik Umar, American Economic Review, 109(10), 2019, 3681-3712.