The investment advisory business manages over US$66 trillion in assets just in the US. Despite its size, the regulation and enforcement of legal requirements for these firms are inconsistent between states and the federal government. In this project, we study the impact different regulatory designs have on adviser misconduct. The project also studies whether external and internal governance mechanisms are substitutes. We also examine whether investment advisory firms themselves establish internal controls and governance systems that are consistent with minimising misconduct among its employees subject to maximising firm profits. The project findings will be relevant to investors, policy makers, and practitioners in the investment advisory business.