The Fiduciary Forum 2010: Daylian Cain

Biased Advice: What’s the problem with conflicts of interest?

Daylian Cain
Asst. Prof. of Organizational Behavior
Yale School of Management

At the Fiduciary Forum in September 2010, behavioral economist Daylian Cain discussed his groundbreaking research on disclosures of conflicts of interest, and their surprising effect on adviser and investor behavior. Although you would think disclosure of conflicts would be good for investors, Cain’s research shows that, perversely, once advisers disclose conflicts, they feel “morally licensed to give misleading advice.” What’s more, “investors are more likely to take that advice.”

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