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Regulation, Human Capital and Increasing the Level of Transparency in Investment Recommendations

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  • Carol Royal

Abstract

Regulatory agencies, the financial community and the investing public need to be aware that more effective investment recommendations and decisions require human capital analysis. It is important to the work of securities analysts, their clients and their industry. Bassi, Lev, Mcmurrer and Sissfield (2001) suggest that non-financial insights, particularly human capital related insights, make up a large proportion of investment decisions. More rigorous qualitative human capital analysis can illuminate the working of an organisation in a way that primary financial data on its own cannot achieve need. A model for outlining the human resource drivers of sustainable human capital is introduced and discussed in response to this need. In essence, an integrated approach is needed for the purpose of making more transparent investment recommendations. In Australia the Regulatory Agency, the Australian Securities and Investment Commission can assist in the adoption of this integrated investment process through the Training of Financial Product Advisors, Licensing Policy Statement 146.

Suggested Citation

  • Carol Royal, 2004. "Regulation, Human Capital and Increasing the Level of Transparency in Investment Recommendations," The Economic and Labour Relations Review, , vol. 15(1), pages 26-50, June.
    • Handle: RePEc:sae:ecolab:v:15:y:2004:i:1:p:26-50
    DOI: 10.1177/103530460401500102
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    References listed on IDEAS

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    1. Leslie Boni & Kent L. Womack, 2002. "Wall Street’s Credibility Problem: Misaligned Incentives and Dubious Fixes?," Center for Financial Institutions Working Papers 02-04, Wharton School Center for Financial Institutions, University of Pennsylvania.
    2. Royal, C., 2001. "Recruitment, Selection, and Internal Labour Market - Evidence from Three Devision of an International Investment Bank," Papers 137, The University of New South Wales. Department of Industrial Relations..
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