Impact Of Compensation And Bonus Policies
Not what you're looking for?
How do compensation and bonus policies impact an Investment Advisor's ethical decision making?
Purchase this Solution
Solution Summary
The impact of compensation and bonus policies are determined.
Solution Preview
Recently, the Financial Industry Regulatory Authority proposed a rule that required all financial services to disclose any hiring bonuses for their advisors. Some of these bonuses are very high. The problem is that this could cause a conflict of interest if these newly hired people then go to former clients and get them to switch to the new firm. Some of these "enhanced compensation practices" are designed to give the impression that the new hire must sell a very high number of investment packages to justify this additional outlay of cash. In turn, this could cause the new hire to push questionable packages just for the sake of making a quick sale.
In 2012, Merrill-Lynch offered a new set of incentives for selling certain types of securities. In their case, it is fee-based assets in particular. Rewards will be given to those brokers and advisors who increase fee-based sales by 10% or more and by at least $5 million. Fee-based investments refer to those arrangements that compensate ...
Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.