Roundtable | Resolving conflicts of interest

• October 22, 2018
• Speakers: Roundtable
  
• Topic: The Case for (Economic) Theory in the Age of Behavioural Economics
  

The work of the Royal Commission into the Banking, Superannuation, and Financial Services Industry has laid bare the conflicts that arise when trusted parties (such as financial institutions or financial advisors) have financial incentives, or duties to others, that might distract them from protecting or prioritising clients’ interests in circumstances where there is a legitimate expectation that they will do so.

The law has a particular view about the impact of such conflicts and how to manage them, including through the longstanding legal concept of the fiduciary.  The fiduciary concept has been adopted or adapted in many forms of business regulation in many jurisdictions.  However, this use of the fiduciary concept may not rest on a sound understanding of how the conflict actually impacts on the actions and decisions of the trusted party.  Similarly, the traditional legal approach to resolving conflicts – by obtaining the client’s informed consent – may ignore important behavioural factors at play in trust-based relationships. Last but not least, economists often let their principal-agent models be informed by a more pessimistic view of human nature.

This Roundtable – organized jointly by the UNSW Business School research networks on Behavioural Insights for Business and Policy and on Cyber Security and Data Governance — focuses on research to support the effective management of conflicts that arise when trusted parties’ and clients’ interests are not aligned. The interim report of the Royal Commission is considered to be an important point of reference for the discussions.

The Roundtable will bring together leading economists, lawyers, regulators and policy makers to discuss behavioural insights from (experimental) economics research and their impact on future thinking about the structure of the financial sector and data-driven innovation in consumer financial services.

The Roundtable is by invitation only.

Expressions of interest are welcome and ought to be directed to a.ortmann@unsw.edu.au or r.nicholls@unsw.edu.au
For information on our 2016 Roundtable, please visit the relevant event here, or see our 2017 Roundtables on Ethics and Big Data.
You might also be interested in the full submission on the interim report by one of the organisers of this Roundtable. It can be found here.