Investor and advisor: an inherently conflictual relationship

Marcio Cezarini Borges, Roberto Arruda de Souza Lima
DOI: https://doi.org/10.21529/RECADM.2026004

Abstract

The Brazilian capital market has seen a significant increase in retail investor participation, driven by economic stabilization, digital access, and the popularization of financial content. Simultaneously, the demand for investment advisory services has risen, with professionals and institutions increasingly acting as intermediaries for individual investors. However, this relationship constitutes a typical agency problem, subject to information asymmetries and potential conflicts of interest, particularly when the advisor's incentives are misaligned with the investor’s objectives. Although the international literature has already documented several conflicting practices, there is a noticeable lack of studies focused on the Brazilian market and on the identification of the agents legally authorized to provide such services, also the absence of a typology of conflicts of interest that contributes to the advancement of the field of study. In this context, the objective of this study is to map the potential conflicts of interest in the advisor–investor relationship and to identify the professionals and institutions legally permitted to offer investment recommendations in Brazil. To achieve this, an analysis of current legislation and a Systematic Literature Review (SLR) were conducted to gather evidence on these conflicts. The results led to the identification of 11 categories of conflicts and 15 types of agents legally operating in this market, allowing connections to be drawn between their individual characteristics and the associated risks. This study contributes by providing a typology of the most recurring conflicts and by enhancing the understanding of the boundaries and risks associated with investment advisory services in the country.


Keywords

conflict of interest; investment advice; agency theory

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References


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