Financial advisor misconduct is prevalent and often involves repeat offenders, according to a new research paper from a trio of academics at the University of Chicago. Thus, in order to protect investors better, the paper suggests regulators do more to expose the disciplinary records of offenders and to alert consumers.

Mark Egan, Gregor Matvos and Amit Seru’s working paper, entitled The Market for Financial Adviser Misconduct, looks at the incidence of advisor misconduct in the U.S. financial services sector, concluding that the problem is widespread.

The research, which is based on a database that the academics constructed to examine the disciplinary records of 1.2 million advisors in the U.S. between 2005 and 2015, finds that approximately 12% of advisors have some incident on their record and 7% have engaged in actual misconduct.

The paper also finds that although firms tend to punish misconduct, this is no bar to re-employment in the securities industry. It notes that although about half of advisors who are punished for misconduct lose their jobs, 44% of them are re-employed by another firm within 12 months.

Approximately one-third of advisors with misconduct records are repeat offenders, the research finds, noting that past offenders are five times more likely to engage in misconduct than the average advisor.

“The large presence of repeat offenders suggests that consumers could avoid a substantial amount of misconduct by avoiding advisors with misconduct records,” the paper suggests. “Furthermore, this result implies that neither market forces nor regulators fully prevent such advisors from providing services in the future.”

In fact, researchers found that particular firms are friendlier to shady advisors: “Our findings suggest that some firms specialize in misconduct and cater to unsophisticated consumers while others use their reputation to attract sophisticated consumers.”

In particular, the paper reports that “More than one in seven financial advisors at Oppenheimer & Co., Wells Fargo Advisors Financial Network and First Allied Securities have engaged in misconduct in their past. At Goldman Sachs & Co. and Morgan Stanley & Co. LLC, the ratio is less than one in 100.”

The researchers suggest that this disparity reflects the culture of the firms involved: “We find that advisors working for firms whose executives and officers have records of misconduct are more than twice as likely to engage in misconduct.”

Given the researchers’ findings, they recommend that regulators seek to lower the incidence of misconduct by increasing market transparency and introducing policies to help unsophisticated consumers access more information.