What are "unethical incentives" in finance?

Unethical incentives in finance are best described as rewards that promote harmful actions towards clients. This definition captures the essence of how certain financial incentives can lead professionals to engage in practices that may not be in the best interests of their clients. For example, if a financial advisor is rewarded for selling a specific product that may not be suitable for a client, this could lead to conflicts of interest and unethical behavior, as the advisor might prioritize their own financial gain over the client’s welfare.

The other choices do not fit the definition of unethical incentives as directly. Compensation based on client satisfaction typically encourages advisors to act in their clients' best interests, while bonuses for achieving sales goals can be problematic but do not inherently involve harm to clients unless they are linked to detrimental actions. Training programs for financial advisors are aimed at improving knowledge and ethical standards, which is contrary to the concept of unethical incentives.