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Career Concerns, Risk-Taking, and Upward Mobility in the Financial Services Industry: Evidence from Top Ranked Financial Advisers

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  • Jun Honda

Abstract

We investigate career concerns of financial advisers with a focus on their risk-taking and upward mobility. We use matched employer-employee data for the universe of financial advisers with one well-known national ranking for top financial advisers. We find that at early career stages before being ranked, top advisers (i) are twice as likely to acquire a certain license to serve as investment adviser, (ii) encounter customer disputes way more frequently (up to seven times), and (iii) switch to a firm of 80% larger size as measured by total assets, than average advisers. We also find that top advisers manage high risks through labour-market penalty reduction associated with disciplinary actions. Lastly, using variations in rm policy for recruitment across firms, we provide evidence that reducing frictions in job mobility yields sorting dynamics that employers recruit high productive workers intensively within a short time window.

Suggested Citation

  • Jun Honda, 2020. "Career Concerns, Risk-Taking, and Upward Mobility in the Financial Services Industry: Evidence from Top Ranked Financial Advisers," Working Papers 2020-16, Faculty of Economics and Statistics, Universität Innsbruck.
    • Handle: RePEc:inn:wpaper:2020-16
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    References listed on IDEAS

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    More about this item

    Keywords

    Career Concerns; Financial Advisers; Job Mobility; Risk-Taking; Sorting;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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