Many professionals in the financial services industry refer to themselves as financial advisors despite tremendous variation in business practices, compensation methods, and duties to act in the best interest of one's client. These variations are believed to result in consumer confusion, however, there is little empirical evidence to inform how consumers actually perceive the use of such titles. This study examines consumer perceptions via a survey of U.S. consumers conducted using Amazon's Mechanical Turk (n = 654). Principal components analysis of semantic differential ratings of professional characteristics indicates two dimensions of particular importance to consumers which appear to coincide with two primary duties of a fiduciary: (1) loyalty (high factor loadings on dimensions of honesty, care, other serving, trustworthiness, helpfulness, and depth) and (2) competence (high factor loadings on dimensions of intelligence, work ethic, and success). Further, results from k-means cluster analysis indicate that consumers perceive common industry titles as fundamentally different from one another in a manner that is consistent with the differentiation of advice professions (e.g., doctor, lawyer, financial advisor, financial consultant) from sales professions (e.g., car salesperson, investment salesperson, stockbroker, life insurance agent). Consumer protection implications of these findings for FINRA and SEC policy proposals are discussed.
